Silicon Motion Inc. (SIMO) Message Board

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Technology Stocks : Silicon Motion Inc. (SIMO)

SIMO 98.89

0.0%

9:38 AM EST

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To: Anonymous895 who wrote (2772)	7/10/2024 9:32:42 AM
From: Elroy	Read Replies (2) of 2969

I don't really know the proper PE for SIMO, but until they can establish success in high end enterprise flash controllers, I would say 12x to 14x seems about the right PE. It's currently a consumer product focused semiconductor stock, in a price sensitive market, which is ex-growth (PCs and cell phones). And it competes directly with it's main customers (NAND makers). It's about as awful a space in tech as one could imagine. Maybe 10x PE is proper? If they succeed in their "new business" initiatives (enterprise flash controllers, auto memory modules), the PE should rise as the new initiatives become a larger share of sales. But even then it's hard to argue SIMO deserves a 15x PE. And I doubt the new areas become $300m in annual sales any time soon. When they do, that's 25% of SIMO's annual sales. Not much as a percentage. I don't understand the current valuation at all.

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