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Silicon Motion (SIMO) Outpaces Stock Market Gains: What You Should Know

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Silicon Motion (SIMO - Free Report) closed at $94.80 in the latest trading session, marking a +1.08% move from the prior day. The stock's change was more than the S&P 500's daily gain of 0.41%. Elsewhere, the Dow gained 0.18%, while the tech-heavy Nasdaq added 0.31%.

The chip company's stock has climbed by 17.71% in the past month, exceeding the Computer and Technology sector's gain of 7.63% and the S&P 500's gain of 3.15%.

Investors will be eagerly watching for the performance of Silicon Motion in its upcoming earnings disclosure. The company is expected to report EPS of $0.88, down 4.35% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $227.87 million, indicating a 7.28% upward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.35 per share and a revenue of $840.76 million, representing changes of -2.33% and +4.63%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Silicon Motion. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Currently, Silicon Motion is carrying a Zacks Rank of #4 (Sell).

With respect to valuation, Silicon Motion is currently being traded at a Forward P/E ratio of 27.98. This represents a premium compared to its industry average Forward P/E of 23.56.

We can also see that SIMO currently has a PEG ratio of 3.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer - Integrated Systems industry had an average PEG ratio of 1.77 as trading concluded yesterday.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 35, placing it within the top 15% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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