Needham Maintains Their Buy Rating on Silicon Motion (SIMO)


In a report released today, Rajvindra Gill from Needham maintained a Buy rating on Silicon Motion (SIMO), with a price target of $58. The company’s shares closed on Wednesday at $35.84, close to its 52-week low of $31.73.

Gill commented:

“Shares reacted positively on Wednesday’s announcement, climbing 11.5% on the news of the company’s new $200MM stock buyback authorization. While SIMO didn’t utilize its previous $200MM stock buyback last year – the stock price hovered around $45-$60 levels — we think the company will actively buy shares under the new authorization given the stock’s 24% decline thus far in November and underperformance YTD (down 39% vs SOX down 6%). Theoretically, SIMO could reduce its share count by 15% and add $0.60-$0.67 to next year’s earnings (on the same level of net income). Stock is currently trading at trough P/E ex-cash multiple of 7.3x on 2019 estimates.”

According to TipRanks.com, Gill is a 5-star analyst with an average return of 12.2% and a 52.2% success rate. Gill covers the Consumer Goods sector, focusing on stocks such as Everspin Technologies Inc, Smart Global Holdings Inc, and Adesto Technologies Corp.

Currently, the analyst consensus on Silicon Motion is a Strong Buy with an average price target of $53.89.

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Silicon Motion’s market cap is currently $1.29B and has a P/E ratio of 13.90. The company has a Price to Book ratio of 2.35.

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Silicon Motion Technology Corp. engages in the development, manufacture, and supply of semiconductor products for the electronics market. It offers embedded and expandable storage, radio frequency integrated circuits, and embedded graphics. The company was founded in November 2005 and is headquartered in Hong Kong.

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