Silicon Motion (SIMO) Gets a Buy Rating from Needham


In a report released today, Rajvindra Gill from Needham reiterated a Buy rating on Silicon Motion (SIMO), with a price target of $47. The company’s shares closed yesterday at $39.

Gill commented:

“Despite poor 1Q19 sales guidance (-18% SIMO’s shares rallied yesterday, implying to us that the bad news has been discounted in the price. Shares have fallen 26% over the past year. While we foresee volatility in the NAND supply chain in the 1H, we remain bullish on client SSD growth fueled by falling NAND pricing and rising attach rates. We think that eMMC weakness is reflected in the estimates and that we could see an open-channel ramp in the 2H19. Ultimately, valuation and potential share repurchases keeps us in the game. With $8 of net cash per share, zero debt, and a $200MM authorized stock buyback, we believe the shares have potentially bottomed. We also believe 1Q19 $0.35 could represent the trough amidst this volatile macroeconomic backdrop.”

According to TipRanks.com, Gill is a 5-star analyst with an average return of 10.6% and a 53.0% 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 Moderate Buy with an average price target of $44.11, implying a 13.1% upside from current levels. In a report issued on January 18, Merrill Lynch also upgraded the stock to Buy with a $45 price target.

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Based on Silicon Motion’s latest earnings release for the quarter ending September 30, the company reported a quarterly net profit of $29.23 million. In comparison, last year the company had a net profit of $9.87 million.

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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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