Silicon Motion (SIMO) Soars 5.1%: Is Further Upside Left in the Stock?
Silicon Motion (SIMO) shares soared 5.1% in the last trading session to close at $62.48. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 2.8% gain over the past four weeks.
Silicon Motion recently restructured its organizational framework to boost growth amid a challenging macroeconomic environment. In addition, the company has executed some management changes to better navigate the volatile market conditions.
These include the establishment of two business units, namely the Client & Automotive Storage (“CAS”) and the Enterprise Storage & Display Interface Solution (“ESDI”), with a focus on delivering the best-in-class solutions for customers. The CAS business unit comprises the company’s client SSD controllers, mobile controllers, Ferri products and expandable controllers, while the ESDI unit encompasses the enterprise SSD controllers and display interface products.
The dedicated business units will likely enable Silicon Motion to develop the most advanced controller technology and deliver industry-leading solutions to tap new market segments for long-term growth. The core focus on controller technology was primarily driven by the increasing adoption of NAND in consumer, industrial, commercial and enterprise applications.
This chip company is expected to post quarterly earnings of $0.71 per share in its upcoming report, which represents a year-over-year change of -41.8%. Revenues are expected to be $190.96 million, down 4.9% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Silicon Motion, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SIMO going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Silicon Motion belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, Ichor Holdings (ICHR), closed the last trading session 2.6% lower at $31.95. Over the past month, ICHR has returned 28.7%.
For Ichor Holdings , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.07. This represents a change of -90.3% from what the company reported a year ago. Ichor Holdings currently has a Zacks Rank of #4 (Sell).
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