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If you are wondering whether Silicon Motion Technology’s current share price offers good value or is running ahead of itself, you are in the right place.
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The stock recently closed at US$112.87, with a 33.5% return over 30 days and a 124.0% return over the last year, which can change how the market views both its growth potential and its risks.
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Recent coverage around Silicon Motion has centered on its role in the broader semiconductor space and ongoing investor interest in companies tied to data storage and memory solutions. This context has kept attention on how the market is pricing its shares compared with peers and with the wider sector.
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Right now, Silicon Motion Technology has a valuation score of 1 out of 6, which suggests only one of our six standard checks points to the shares being undervalued. Next, we will look at what different valuation methods say about that number and introduce a more detailed way to think about valuation by the end of the article.
Silicon Motion Technology scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model estimates what a company could be worth today by projecting its future cash flows and then discounting those back to the present using a required return. It is essentially asking what all those future cash flows are worth in today’s dollars.
For Silicon Motion Technology, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flows in US$. The latest twelve month free cash flow is about $0.49 million. Analysts provide explicit free cash flow estimates out to 2027, with 2027 projected at $124.4 million. Beyond that, free cash flow out to 2035 is extrapolated using Simply Wall St estimates rather than new analyst forecasts.
When all of these projected cash flows are discounted back to today, the resulting intrinsic value from this DCF is US$36.54 per share. Compared with the recent share price of about US$112.87, the model implies the stock is very expensive, with an intrinsic discount indicating it is 208.9% overvalued.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Silicon Motion Technology may be overvalued by 208.9%. Discover 863 undervalued stocks or create your own screener to find better value opportunities.
SIMO Discounted Cash Flow as at Jan 2026
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Silicon Motion Technology.
For profitable companies, the P/E ratio is a useful way to gauge how much you are paying for each dollar of earnings. It ties the share price directly to the business’s current earnings power, which most investors track closely.
What counts as a “normal” P/E depends on how the market views the company’s growth prospects and risks. Higher expected growth or lower perceived risk can justify a higher P/E, while slower expected growth or higher risk usually supports a lower one.
Silicon Motion Technology currently trades on a P/E of 39.77x. That sits below the broader Semiconductor industry average of 43.73x, but above the peer group average of 29.16x. Simply Wall St’s Fair Ratio for the stock is 30.98x, which is the P/E level their model suggests based on factors like earnings growth, profit margins, industry, market cap and company specific risks.
This Fair Ratio can be more useful than a simple comparison with peers or the industry, because it adjusts for Silicon Motion Technology’s own characteristics rather than assuming it should trade exactly like its neighbours. Compared with the current P/E of 39.77x, the Fair Ratio of 30.98x points to the shares trading on a richer multiple than the model suggests.
Result: OVERVALUED
NasdaqGS:SIMO P/E Ratio as at Jan 2026
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1445 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, where you set a clear story for Silicon Motion Technology, link that story to your own revenue, earnings and margin assumptions, and then see a fair value that you can compare with the current price. All of this is available inside Simply Wall St’s Community page, which updates as new earnings or news arrive and can reflect very different viewpoints. For example, one investor might build a higher fair value around strong AI storage demand and a US$114 price target, while another might anchor on a more cautious view with an US$80 target. This can help you decide whether the market price looks high, low or broadly in line with the story you believe.
Do you think there’s more to the story for Silicon Motion Technology? Head over to our Community to see what others are saying!
NasdaqGS:SIMO 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SIMO.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
