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Silicon Motion Technology (SIMO) has drawn fresh attention after a month return of 31.4%, coupled with a past 3 months gain of 17.1%. That price move is prompting investors to recheck fundamentals.
The company reports annual revenue of US$798.3m and net income of US$96.5m, supported by reported annual revenue growth of 13.1% and net income growth of 29.5%. These figures help frame today’s valuation discussion.
See our latest analysis for Silicon Motion Technology.
At a share price of US$117.10, Silicon Motion Technology has seen strong recent momentum, with a 31.4% 1 month share price return feeding into a 135.6% 1 year total shareholder return. That kind of performance often reflects investors reassessing growth prospects or risk, especially after solid reported revenue and net income figures.
If you are looking beyond a single semiconductor name, this could be a useful moment to scan other high growth tech and AI stocks through high growth tech and AI stocks.
With SIMO trading near US$117 and sitting close to its analyst price target, the key question is whether recent gains still leave room for mispricing, or if the market is already factoring in future growth.
At a last close of $117.10 compared with a narrative fair value of about $114.00, Silicon Motion Technology is framed as slightly ahead of its intrinsic value, with that view anchored in detailed long term forecasts for growth, margins, and required returns.
Strategic partnerships with hyperscalers, automotive OEMs, and module makers, together with long-term supply agreements, are enhancing gross margin visibility and laying the foundation for sustainable top-line growth and the potential to achieve or exceed a $1 billion revenue run rate with significant operating margin improvement.
Curious what earnings profile and margin path support that fair value, and how the required return and future P/E fit together? The most followed narrative ties those pieces into one tight set of assumptions.
Result: Fair Value of $114.00 (OVERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, that narrative can be challenged if intense price competition compresses margins or if rising R&D and operating expenses run ahead of revenue.
Find out about the key risks to this Silicon Motion Technology narrative.
If you are not fully on board with this view, or you just prefer to pull the numbers yourself and stress test the assumptions, you can shape a fresh narrative in only a few minutes with Do it your way.
A great starting point for your Silicon Motion Technology research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
If SIMO has caught your eye, do not stop there. Use the Simply Wall St screener to spot other opportunities that fit your style before others do.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SIMO.
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