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Silicon Motion (SIMO) Gains As Market Dips: What You Should Know

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Silicon Motion (SIMO - Free Report) closed at $92.01 in the latest trading session, marking a +0.97% move from the prior day. This change outpaced the S&P 500's 0.1% loss on the day. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 0.47%.

Heading into today, shares of the chip company had gained 0.69% over the past month, outpacing the Computer and Technology sector's loss of 1% and lagging the S&P 500's gain of 3.67% in that time.

Investors will be hoping for strength from Silicon Motion as it approaches its next earnings release. The company is expected to report EPS of $1.74, up 102.33% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $246.62 million, up 71.38% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Silicon Motion. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 5.49% lower within the past month. Silicon Motion currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Silicon Motion currently has a Forward P/E ratio of 12.85. Its industry sports an average Forward P/E of 22.76, so we one might conclude that Silicon Motion is trading at a discount comparatively.

It is also worth noting that SIMO currently has a PEG ratio of 1.43. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SIMO's industry had an average PEG ratio of 1.62 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 85, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SIMO in the coming trading sessions, be sure to utilize Zacks.com.


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