Where is this Transcend news? I just looked on their website and didn't see any press release about Q1 revenues. I don't know the details of SNDK's product roadmap for TLC and other flavors of stuff. But it seems their problems are specific to SNDK and not signs of general NAND industry weakness.
It's hard to map SNDK discussion into SIMO's business since (I think) SNDK is not much of a SIMO customer. But SNDK said two things of note in their call that may affect SIMO. The first was that there has been a large shift from expensive PCIe SSDs to less expensive and "good enough" SATA-3 SSDs. That's perhaps good for SIMO since SIMO has SATA-3 controllers on the market, but doesn't have a PCIe controller out yet. The second thing was SNDK talked a bit about the importance of streamlining the firmware and controller architecture from all the acquisitions they have done. It's good to hear them discuss the importance of the controller and firmware system.
Naturally one way to streamline their controller and firmware architecture would be to just buy it from SIMO - haha! dream on!
I was expecting to get the Q2 dividend announcement out of SIMO this week, but maybe not. Lets hope for a new high today, not too far away from the old high....
I think you may be correct. The transceiver sales in Q1 for SIMO would be for design wins from summer 2014. So that can be lumpy, and maybe was pretty good in Q1. I recall SIMO said that LTE in Q1 2015 would be UP from Q4 2014, so it can easily tack on a million or two extra sales. The outlook for LTE going forward is a bit more murky due to the reasons listed.
No, 10% year over year would not be enough to keep the stock this high. Last year in Q2 they did about $68M (?? can't really recall). A 10% year on year gain from that would only be $75m for Q2, which would be a BIG disappointment. Face it, SIMO is a go go growth stock now, they need to put up the big revenue growth numbers to keep the share price moving up now. Hopefully they can get multiple expansion. A 20x PE would be about $40, 25x PE would be about $50. Both of those prices sound quite high, but since SIMO may grow revenues 25% in 2015, and grow EPS more than that, 25x PE doesn't seem too loopy. Just sit back and spill your martini (what happened to that guy??) and enjoy!
Their weight diluted share count (actually, American Depository Receipt count, since they are an ADS stock, not a normal US stock) was 34.47m in Q4 2014. I think the middle of the updated guidance and the old expense number, 18% tax and 34.4m shares will give you 45 cents EPS. Seems good enough to get the shares to hold around $30. It also means in order to deliver 20% annual revenue growth in 2015 they only need to average $88m for the next three quarters. That should be pretty easy since Q1 is the weak quarter and Q2 and Q3 are the strong growth quarters. We just gotta find out whether they're going to grow 10% sequentially in Q2 and Q3, or hopefully more. Seems to me like a nice time to be sitting long and awaiting the numbers to roll out over the next 6 months.....
Your EPS numbers are way different than mine. With $80.5m revenues, gross margins 51.5%, expenses $22.5m, tax rate of 18% and 34.4m shares, I got 45 cents. I don't know how you got 47 cents with lower revenues, lower gross margins and higher expenses!? What's your share count??
I think the numbers are less important for the next 6 months than the momentum, which is probably going to be up up and away. As long as there are no negative shock announcements I'll bet SIMO will just push higher as the months wear on. The only big stumbling block I can think of is what is happening (or not happening) with the LTE business. The eMMC and SSD business will grow and grow, and hopefully push the shares to a higher PE valuation. Semi stocks that grow revenues 10% pear year trade at 18x, lets hope SIMO gets up to an above 20x PE. The more revenue growth they put out there the harder it will become to resist the upward pressure.
I think the evidence that SIMO is not in the Galaxy is in their LTE guidance. The guidance for 2015 LTE transceiver sales given in late Jan 2015 is as follows
1. 2015 LTE revenues should be flat with 2014 LTE revenues, and that outcome is dependent on hoped for but not yet achieved 2014 LTE design wins.
2. Q1 2015 LTE revenues will be above Q4 2014 LTE revenues.
Put those two statements together, and it seems like their chances of meaningful design wins in 2015 is really really low. Even with Q1 2015 up from Q4 2014 LTE revenue levels, they still only expect flat LTE revenues in 2015. If they had a chance of being in the Galaxy models, or winning meaningful Samsung LTE business, the 2015 guidance should have been much higher.
Anyway, it can all change when they give a business update on the Q1 2015 call, but I'm not optimistic.
It would be a big big surprise if SIMO was in the Galaxy s6 to be sold by AT&T. The 2015 LTE guidance was "flat with 2014 levels", if SIMO is in the Galaxy s6 it would be much higher. Still, who knows? We can hope that SIMO has known it will be in the Galaxy s6 for a while, but for some reason Samsung asked them not to announce it? Seems strange, but I think Samsung as a customer may be a bit strange. SIMO should pre-announce Q1 revenues this upcoming week. That's the next clue....
I've read that the Shannon 333 is the Samsung LTE modem, but who knows? I actually hope it is Intel, because if it's Samsung it sounds like the SIMO LTE transceiver has been designed out of the Samsung LTE baseband. SIMO hasn't said anythiing indicating they are getting a lot of business from Samsung's LTE division recently. If SIMO were in the Galaxy s6 at AT&T the share price should be shooting through the roof.
I don't think Yahoo lets us post website links, but if you do a Google search for "att galaxy s6 support" the first website listed is the AT&T new cell phones page. Then click on the "Details" tab, and under Chipset it says:
Samsung Exynos® 7420 with Shannon 333 modem
I'm being told the Shannon 333 is the Samsung LTE modem.
It means SIMO is either going to blow away revenues numbers soon, or their transceiver has been designed out of the Samsung LTE modem.
They aren't much of a SIMO customer, but having any company in the NAND industry go "BOOM" isn't good for SIMO. It will be interesting to see the MU quarterly report next week to see what they have to say about NAND. SNDK did say that delayed customer acceptance of some products was a cause of their sales shortfall. Maybe that's the 2nd eMMC TLC controller product line? It's a guess, but that's the only way I can see SNDK's bad news as being meaningfully bad for SIMO, and that product line is just entering mass production in Q1.
Oh well, I was hoping for an end of quarter SIMO rally, but SNDK has killed the mood.
I think Samsung has been trying for DECADES to make its own modem chip, and for DECADES failing to do so in a meaningful way that would allow it to reduce its dependence on QCOM. So the article is just an article, it is nowhere near proof that Samsung will use its own basebands more than it had in the past. So far this quarter we have NOT received a press release indicating SIMO won a design win in a Samsung phone model. We got a press release of this type in Q1 2014, no such press release in Q1 2015. I think this indicates bad news for SIMO's LTE business. But, as usual, the big news will come in the Q1 conference call, anything could happen, but so far the tea leaves are not arranging themselves in an appealing way.
Of course you should refile. You paid tax on the non-dividend distribution, but you owe zero for it. The idea that there is a high risk of audit if you amend your returns due to a change in allocation of NMM distributions is ridiculous. Just include a letter explaining that you filed on Mar 9, and you received the revised 1099 on Mar 12. I think the IRS will receive the same revision from TD, so there will be no reason for them to think your refiling is odd. Get yo money back!!
I think s6 launches in different regions at different months. Historically SIMO has been in the Korean models, maybe even the 2nd launch of the Korean models, and revenue appeared in Q3, so I don't think 4/10 is going to be any meaningful LTE indicator. We haven't gotten a LTE press release, so I doubt SIMO has any presence in the s6.
SIMO has said they expect to do $12m in LTE sales in 2015, and that is a combination of spillover from 2014 design wins and hoped for 2015 design wins. We'll get more detailed news on LTE as the quarters roll on. If the LTE number is going to be "only" $12m, I doubt SIMO is in any of the Galaxy s6 models. So......don't expect LTE in the Galaxy s6, but who knows, if they do win for example the Korean Galaxy s6 models, the LTE sales number for 2015 will probably be more than $12m. Based on history, if they win some Galaxy s6 business it will be announced in the Q1 conference call in late April.
There was a report out on SIMO today from Brean Capital. It said they met the head of SIMO IR and he indicated SIMO doesn't have visibility into over $12m of 2015 transceiver sales, so if expectations for more than $12m LTE sales was the reason for the runup, perhaps that expectation has deflated out of the shares. The rest of the business remains on track, just the likelihood for a huge Samsung s6 LTE win seems low,
I've been wondering this one. I don't think any of the NAND makers (SK Hynix in particular) would acquire SIMO, because then the other NAND makers would be lost as customers. Same with the SSD device makers. So an acquirer should be a large pure play semiconductor maker. MRVL makes sense, although there is lots of product overlap, MRVL makes both SSD controllers and LTE-related stuff. After MRVL, I haven't got much of an idea who might want to own SIMO. Perhaps INTC could acquire SIMO?