Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.7 |
| P/S | 5.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 7.6 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 16.1x
- ▸PEG: 0.07
SIMO · Why this verdict
Why Silicon Motion Technology Corpo (SIMO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score7.1/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Silicon Motion Technology delivered 106% year-over-year revenue growth and has beaten earnings estimates in 3 of the last 4 quarters with an average positive surprise of 31%, but the stock trades above the analyst consensus target with negative asymmetry and a free cash flow red flag that warrants caution before adding exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Silicon Motion achieved 106% year-over-year revenue growth, positioning it as a top-ranked growth performer among semiconductor peers and reflecting strong demand for its NAND flash controller chips across storage markets. Growth breakdown | Revenue growth remains above 40% year-over-year for at least 2 of the next 4 reported quarters, demonstrating sustained above-market demand. | →Stable |
| CounterTriple-digit revenue growth often reflects a base-period comparison effect following a prior-year downcycle; growth rates at these levels are nearly impossible to sustain and will decelerate sharply. | ||
Silicon Motion has beaten earnings per share estimates in 3 of the last 4 quarters with an average positive surprise of 31%, including a significant beat of 80% in the most recent quarter, demonstrating management's ability to execute above expectations. Earnings | Earnings beats continue in at least 3 of the next 4 quarters with average positive surprise above 15%. | →Stable |
| CounterThe earnings beat pattern in semiconductor companies often coincides with up-cycles; the one miss in the streak and cyclical industry dynamics could see the beat rate revert at a cycle turn. | ||
Despite strong reported net income, Silicon Motion's free cash flow is negative 74% relative to net income, a red flag indicating that accounting earnings significantly overstate cash generation, which reduces the quality of the earnings beat narrative. Quality breakdown | Free cash flow as a percentage of net income improves to above positive 30% within the next four quarters, indicating the cash conversion gap is closing. | →Stable |
| CounterNegative free cash flow relative to net income in a high-growth semiconductor company often reflects heavy working capital investment or capital expenditures that are growth-enabling rather than a warning sign. | ||
With the stock at $276.40 trading above the analyst consensus implied level and showing negative 19.2% to the analyst target plus negative asymmetry ratio of negative 1.3, the stock is priced beyond where analysts believe it is worth on a 12-month horizon. Warnings | Analyst price targets rise to at least $320, more than 16% above current price, driven by upward earnings revisions before the stock can be considered attractively priced relative to consensus. | ↑Improving |
| CounterThe resistance-based take-profit of $308.05 suggests a technical pathway to further gains even if analyst targets are not raised, through momentum-driven price discovery. | ||
Silicon Motion achieved 106% year-over-year revenue growth, positioning it as a top-ranked growth performer among semiconductor peers and reflecting strong demand for its NAND flash controller chips across storage markets.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 40% year-over-year for at least 2 of the next 4 reported quarters, demonstrating sustained above-market demand.
CounterTriple-digit revenue growth often reflects a base-period comparison effect following a prior-year downcycle; growth rates at these levels are nearly impossible to sustain and will decelerate sharply.
Silicon Motion has beaten earnings per share estimates in 3 of the last 4 quarters with an average positive surprise of 31%, including a significant beat of 80% in the most recent quarter, demonstrating management's ability to execute above expectations.
→StableEarnings
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters with average positive surprise above 15%.
CounterThe earnings beat pattern in semiconductor companies often coincides with up-cycles; the one miss in the streak and cyclical industry dynamics could see the beat rate revert at a cycle turn.
Despite strong reported net income, Silicon Motion's free cash flow is negative 74% relative to net income, a red flag indicating that accounting earnings significantly overstate cash generation, which reduces the quality of the earnings beat narrative.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income improves to above positive 30% within the next four quarters, indicating the cash conversion gap is closing.
CounterNegative free cash flow relative to net income in a high-growth semiconductor company often reflects heavy working capital investment or capital expenditures that are growth-enabling rather than a warning sign.
With the stock at $276.40 trading above the analyst consensus implied level and showing negative 19.2% to the analyst target plus negative asymmetry ratio of negative 1.3, the stock is priced beyond where analysts believe it is worth on a 12-month horizon.
↑ImprovingWarnings
- Expectation
- Analyst price targets rise to at least $320, more than 16% above current price, driven by upward earnings revisions before the stock can be considered attractively priced relative to consensus.
CounterThe resistance-based take-profit of $308.05 suggests a technical pathway to further gains even if analyst targets are not raised, through momentum-driven price discovery.
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 6.8 |
| Gross margin | 5.8 |
| Op margin | 9.0 |
| Net margin | 10.0 |
| Current ratio | 8.6 |
| FCF quality | 0.0 |
| Moat | 8.2 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 32%
- ▸Strong margins: 22%
- ▸Earnings quality RED FLAG: -68% FCF/NI
- ▸Wide economic moat
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 127% YoY
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 1.2 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 8.2 |
| Price target | 9.3 |
- ▸Light analyst coverage (10.0) — signal dampened
- ▸Analyst upside: 44%
Insider
6.7/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 5.0 |
- ▸Insider selling (low materiality) — $1,258,320 (0.014% of mkt cap)
- ▸Institutions accumulating
Peer rank
7.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.5 |
| quality rank | 7.7 |
| growth rank | 9.4 |
- ▸Superior ROE vs peers
- ▸Industry growth leader
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.3 |
| support resistance | 3.6 |
| 52w position | 4.5 |
| gap | 5.0 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 9.8 |
| volatility | 0.0 |
| put call | 9.5 |
| implied vol | 0.5 |
| max pain risk | 7.0 |
| beta | 4.3 |
| debt equity | 9.7 |
- ▸High IV: 77%
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 9.7 |
| dividend safety | 4.3 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (8)
- MOMENTUM:4.9>=4.5
- ASYMMETRY:1.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:54d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
1.93
Upside
+25.5%
Downside
13.2%
Sizing output
AVOID
SetupRange Bound — RSI 44 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.70>1.3
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:4.9>=4.5. Top dim: Growth at 10.0; weakest: Technical at 4.1. No conviction either direction.
The strongest dimensions are Growth at 10.0, Sentiment at 7.5, and Quality at 7.4; the weakest are Technical at 4.1, Momentum at 4.9, and Catalyst at 6.0. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 1.93 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Revenue Growth Rate
Trip ifRevenue growth falls below 20% year-over-year in any single reported quarter, indicating the base-effect tailwind is dissipating faster than expected.
- P2Consistent Earnings Delivery
Trip ifEPS surprise falls below negative 15% in at least 2 of the next 4 quarters, breaking the established earnings delivery pattern.
- P3Free Cash Flow Quality Concern
Trip ifFree cash flow as a percentage of net income remains below negative 50% for two consecutive quarters, confirming the cash conversion gap is not improving.
- P4Analyst Target Exceeded Negative Asymmetry
Trip ifStock price rises above $310, more than 12% above current levels of $276.40, without a corresponding analyst price target upgrade, worsening negative asymmetry further.