Silicon Motion (SIMO) Gains As Market Dips: What You Should Know

This story originally appeared on Zacks

Silicon Motion (SIMO) closed at $92.01 in the last trading session, recording a move of +0.97% from the day before. This change outpaced the S&P 500’s 0.1% loss on the day. Elsewhere, the Dow Jones lost 0.47%, while the big tech Nasdaq lost 0.47%.

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Heading into the day, the chip company’s shares have gained 0.69% over the past month, outpacing the computer and technology sector’s 1% loss and backing the S&P 500’s 3.67% gain in the time.

Investors are hoping for strength from Silicon Motion as it nears its next earnings release. The company is expected to report earnings per share of $1.74, up 102.33% from the previous quarter. Meanwhile, the Zacks Consensus revenue report expects net sales to be $246.62 million, up 71.38% from the same period last year.

It’s also important to note the recent changes to analyst estimates for Silicon Motion. These reviews help show the ever-changing nature of near-term business trends. As a result, we can interpret positive rating reviews as a good sign of the company’s business outlook.

Based on our research, we believe that these discretionary reviews are directly related to stock movements close to the team. Investors can take advantage of this using Zacks Rank. This model takes into account these changes in grading and provides a simple and actionable rating system.

Ranging from #1 (strong buy) to #5 (strong sell), the Zacks Rank system has an externally audited track record of outperforming, returning the #1 stock an average of +25% per year since 1988. Zacks Consensus EPS estimate has decreased By 5.49% over the past month. Silicon Motion currently has a Zacks rating of 3 (Hold).

Looking at the rating, Silicon Motion currently has a forward P/E ratio of 12.85. Its industry has an average forward P/E of 22.76, so one might conclude that Silicon Motion is trading at a relatively discount.

It is also worth noting that SIMO currently has a PEG ratio of 1.43. This metric is used similarly to the popular P/E ratio, but the PEG ratio also takes into account the expected earnings growth rate for the stock. SIMO Industry’s average PEG ratio was 1.62 as of yesterday’s close.

The electronics-semiconductor industry is part of the computer and technology sector. This group has a Zacks Industry Rating of 85, placing it in the top 34% of all 250+ industries.

Zacks Industry Ranking measures the strength of our industry groups by measuring the average Zacks rating of the individual stocks within the groups. Our research shows that industries ranked 50% outperform the bottom half by a factor of 2 to 1.

To follow SIMO in upcoming trading sessions, be sure to use Zacks.com.

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