IIn the last trading session, Silicon Motion (SIMO) closed at $71.99, marking a +0.57% move from the previous day. This change outpaced the S&P 500’s 0.27% loss on the day. Meanwhile, the Dow gained 0.4% and the Nasdaq, a technology-heavy index, lost 0.18%.
Today, shares of the chip company had gained 2.21% over the past month. Over the same period, the IT & Technology sector gained 7.53%, while the S&P 500 gained 7.36%.
Investors are hoping for strength from Silicon Motion as its next earnings release approaches. The company is expected to post EPS of $1.48, up 33.33% from the prior year quarter. Our most recent consensus estimate calls for quarterly revenue of $228.76 million, up 25.42% from the prior year period.
For the full year, our Zacks consensus estimates call for earnings of $7.71 per share and revenue of $1.14 billion, which would represent swings of +24.15% and +23, 62%, respectively, compared to the previous year.
Investors might also notice recent changes in analyst estimates for Silicon Motion. These recent revisions tend to reflect the evolving nature of short-term trading trends. With this in mind, we can view positive estimate revisions as a sign of optimism about the company’s business prospects.
Research indicates that these revisions to estimates are directly correlated to near-term stock price dynamics. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes into account these estimation changes and provides a clear and actionable scoring model.
The Zacks ranking system ranges from #1 (strong buy) to #5 (strong sell). It has a remarkable, externally audited track record of success, with No. 1 stocks delivering an average annual return of +25% since 1988. Zacks Consensus’ EPS estimate has remained flat over the past month. Silicon Motion currently sports a Zacks rank of #3 (Hold).
In terms of valuation, Silicon Motion is currently trading at a forward P/E ratio of 9.29. For comparison, its industry has an average Forward P/E of 18.41, which means Silicon Motion is trading at a discount to the group.
Additionally, it is worth mentioning that SIMO has a PEG ratio of 1.03. This popular measure is similar to the widely known P/E ratio, except that the PEG ratio also takes into account the company’s expected earnings growth rate. Electronics – Semiconductor stocks hold, on average, a PEG ratio of 1.31 based on yesterday’s closing prices.
The Electronics – Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 95, which places it in the top 38% of over 250 industries.
The Zacks Industry Rankings are ranked from best to worst in terms of the average Zacks Ranking of individual companies in each of these industries. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and more, at Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.