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Silicon Motion (SIMO) Exceeds Market Returns: Some Facts to Consider

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Silicon Motion (SIMO - Free Report) closed at $95.06 in the latest trading session, marking a +2.91% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.44%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq gained 0.7%.

Heading into today, shares of the chip company had gained 20.86% over the past month, outpacing the Computer and Technology sector's gain of 9.59% and the S&P 500's gain of 4.03%.

Analysts and investors alike will be keeping a close eye on the performance of Silicon Motion in its upcoming earnings disclosure. In that report, analysts expect Silicon Motion to post earnings of $0.88 per share. This would mark a year-over-year decline of 4.35%. Simultaneously, our latest consensus estimate expects the revenue to be $227.87 million, showing a 7.28% escalation compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $3.35 per share and a revenue of $840.76 million, signifying shifts of -2.33% and +4.63%, respectively, from the last year.

Investors should also take note of any recent adjustments to analyst estimates for Silicon Motion. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Silicon Motion presently features a Zacks Rank of #3 (Hold).

Digging into valuation, Silicon Motion currently has a Forward P/E ratio of 27.56. This expresses a premium compared to the average Forward P/E of 22.65 of its industry.

We can also see that SIMO currently has a PEG ratio of 3.91. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Computer - Integrated Systems stocks are, on average, holding a PEG ratio of 2.08 based on yesterday's closing prices.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 36, which puts it in the top 15% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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