SIMOSilicon Motion Technology Corporation
Is the business good?
The checks split: nothing decisive, though margins compressing.
Operating profit is mostly backed by cash. Conversion is worsening vs a year ago.
Operating margin has narrowed over the past few years, profitability per dollar of sales is eroding.
A balanced mix of margins, efficiency, and leverage. ROE 15% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is SIMO?
Silicon Motion Technology Corporation earns 12% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 2.7 points above what the capital costs: growth creates value
- Operating margin
- 11%
Operating margin · Semiconductors median 7.5% · fiscal year to FY2025
- Cash conversion
- 0.75×
Cash conversion · 1.02× a year ago · most of the operating profit arrived as cash, working capital took the rest
- Share count, year on year
- −0.13%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 15% |
| FY2021 | 27% |
| FY2022 | 23% |
| FY2023 | 6.2% |
| FY2024 | 11% |
| FY2025 | 11% |
Details›
- Gross marginfiscal year to FY2025
- 48%
- Operating marginfiscal year to FY2025
- 11%
- Net marginfiscal year to FY2025
- 14%
- Free cash flow margin
- 0.71%
- R&D as % of revenue
- 30%
- Revenue, trailing twelve months
- $886M
- Free cash flow, trailing twelve months
- $6.3M
- Net income, trailing twelve months
- $123M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 12%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.