About Silicon Motion Technology CORP
Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. It offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the Ferri SSD, Ferri-eMMC, and Ferri-UFS brands.
The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, South Korea, China, Malaysia, Singapore, and internationally. Silicon Motion Technology Corporation was founded in 1995 and is based in Hong Kong, Hong Kong.
SIMO operates in the Manufacturing | Electronic Equipment | approximately 1,430 employees | led by CEO Wallace C. Kou.
$1.8 billion 20.1x P/E 2.3x P/B 12.2x EV/EBITDA 11.8% ROE 25.7% rev. growth 3.7% yield
Silicon Motion Technology CORP earns a Buy rating from our quantitative model with a composite score of 75/100, ranking #15 among 7,333 U.S. stocks. The model sees a stock with an above-average factor profile — not without risks, but with enough quantitative support to warrant a constructive outlook.
The strongest dimension is value at 86/100, which places SIMO in the top 14 percent of all stocks on this measure. quality at 84/100 provides secondary support. No single factor falls below the average threshold, which is a constructive sign.
Within the Manufacturing sector, SIMO ranks 7th out of 50 peers, placing it in the 86th percentile. At $1.8 billion, the company is a small-cap stock with higher potential but also higher risk.
Quality Analysis
Silicon Motion Technology CORP's quality score of 84/100 places it among the top profitability performers in the market. The quality factor evaluates margins, return on equity, return on assets, and earnings consistency — the fundamental building blocks of a durable business.
Return on equity of 11.8% exceeds the sector median of -2.0%. Gross margins of 45.9% are competitive for the sector. Operating margins of 11.3% sit above the 3.0% sector average.
Net margins of 11.1% show the company is profitable, though not with exceptional efficiency.
Valuation Assessment
A value score of 86/100 puts SIMO in the top 14 percent of all stocks on cheapness — suggesting the market is significantly underpricing the company's fundamentals. Key valuation metrics include a P/E ratio of 20.1x, an EV/EBITDA of 12.2x, a price-to-book of 2.3x, a price-to-sales of 2.2x. Deep value scores like this historically correlate with above-average forward returns, though they can also reflect legitimate concerns about business quality that the value factor does not capture.
Momentum & Timing
Silicon Motion Technology CORP's momentum score of 84/100 places it among the strongest trending stocks in the market. The stock has been outperforming roughly 84 percent of all other companies over the relevant measurement window. The academic literature, starting with Jegadeesh and Titman's seminal 1993 research, demonstrates that stocks with this kind of relative strength tend to continue outperforming for three to twelve months.
Revenue growth of 25.7% is fueling the price trend from the fundamental side. A beta of 1.57 means Silicon Motion Technology CORP moves more aggressively than the market, amplifying both gains and losses.
Our entry timing model currently signals Favorable, which warrants caution despite the price trend.
Risk Factors
No investment comes without risks, and honest analysis requires flagging them clearly:
- High market sensitivity. A beta of 1.57 means SIMO amplifies market moves by 57%. In a broad market sell-off, this stock would likely decline significantly more than the indices.
- Model limitations. Quantitative models measure what is measurable — financial ratios, price trends, leverage — but cannot capture qualitative factors like management quality, competitive positioning, or pending litigation. This analysis should be supplemented with fundamental due diligence.
- Market regime risk. Factor-based strategies perform differently across market regimes. The current factor exposures that support Silicon Motion Technology CORP's rating may become headwinds if the macro environment shifts — for example, if interest rates move sharply or if sector rotation accelerates.
Bottom Line
Silicon Motion Technology CORP earns a Buy rating with a composite score of 75/100 and 4 out of 5 stars, ranking #15 among 7,333 stocks. The factor profile is constructive — not without blemishes, but with enough quantitative support to position SIMO above the majority of the market.
Explore the full SIMO analysis page for interactive factor breakdowns, or view the complete stock rankings.
Analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.
