Silicon Motion Technology Corporation (NASDAQ:SIMO) Stock is Soaring, Here is Why

Silicon Motion Technology Corporation (NASDAQ:SIMO) Stock is Soaring, Here is Why

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The Silicon Motion Technology Corporation (SIMO) shares are trading at higher $46.51 and the avg recommendation for the stock is Moderate Buy. The current analyst price target stands at $54.99.

To add more color to this target, the company’s high over the last year is $53.04 and the low is $26.72. Over the last 52 weeks, SIMO is down -12.31% while the S&P 500 is down -2.55%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, SIMO reported a profit of $63.89 million. Silicon Motion Technology Corporation also saw revenues increase to $132.77 million. In addition, SIMO has free cash flow of $33.21 million as of 03-2020 The company’s EBITDA came in at $28.28 million which compares well with its peers.

SIMO booked profit margins of 16.60%, its Return on Equity (ROE) is 14.80%, and its Return on Assets is 11.80%. All told, it is clear that, SIMO needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. SIMO has a short ratio of 0.90 and outstanding shares of 35.02M.

Company Outlook

SIMO has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 0.2 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 2.33. Silicon Motion Technology Corporation SIMO also noted assets of $719.92 million at the end of the last quarter. Investors should also keep an eye on sector updates as SIMO has historically followed its peers on positive news.

All told, Silicon Motion Technology Corporation SIMO has strung together solid data and demonstrated underlying fundamentals. At its current valuation, SIMO represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Silicon Motion Technology Corporation SIMO is now commanding a market cap of 1.65B and a float of 28.79M. SIMO is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of SIMO stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in SIMO, either long or short, and we have not been compensated for this article.