Silicon Motion Technology Corporation CAPEX jumped on 541% and Revenue increased slightly on 1.3%
01/29/2019 • About Silicon Motion Technology Corporation (
$SIMO) • By InTwits
Silicon Motion Technology Corporation reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Silicon Motion Technology Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $75m in 2018, $12m in 2017, $12m in 2016, $24m in 2015, $12m in 2014
- The company has highly profitable business model: ROIC is 19.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Silicon Motion Technology Corporation's Revenue increased slightly on 1.3%. Revenue growth showed slowdown in 18Q4 - it was -9.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.4 pp from 23.4% to 18.0% in FY2018.
Gross Margin increased slightly on 1.2 pp from 48.0% to 49.2% in 2018. During 2014-2018 Gross Margin bottomed in 2017 at 48.0%. SG&A as a % of Revenue increased slightly on 0.67 pp from 8.2% to 8.8% in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2016 at 7.7% and was growing since that time.
Net Income margin increased on 4.2 pp from 14.3% to 18.5% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 14.1% in 2018. Silicon Motion Technology Corporation's CAPEX/Revenue increased on 7.6 pp from 6.5% in 2015 to 14.1% in 2018. For the last three years the average CAPEX/Revenue was 6.2%. The company maintained rich investment policy and has spent a big chunk of EBITDA (62.6%) to CAPEX.
Return on investment
The company operates at good ROIC (19.5%) and ROE (19.1%). ROIC increased slightly on 1.0 pp from 18.5% to 19.5% in 2018. ROE increased on 3.1 pp from 16.0% to 19.1% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.4x and Debt / EBITDA is 0.0x. Debt dropped on 98.8% while cash dropped on 20.7%.
Silicon Motion Technology Corporation has no short term refinancing risk: cash is higher than short term debt (89,338.2%).
Valuation and dividends
Silicon Motion Technology Corporation's trades at EV/EBITDA 9.6x and P/E 14.7x.
Management team
The company's CEO is Wallace C Kou. Wallace C Kou is a founder and has 24 years tenure with the company. The company's CFO is Riyadh Lai. Riyadh Lai has 12 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
Silicon Motion Technology Corporation ($SIMO) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 289.3 | 361.3 | 556.1 | 523.4 | 530.3 | 1.3% |
| Gross Profit | 149.7 | 184.5 | 274.6 | 251.2 | 260.8 | 3.8% |
| SG&A | 29.7 | 35.9 | 42.8 | 42.8 | 46.9 | 9.6% |
| EBITDA | 66.0 | 85.4 | 148.8 | 108.5 | 119.6 | 10.3% |
| Net Income | 44.5 | 60.3 | 110.9 | 75.0 | 98.1 | 30.8% |
Balance Sheet
|
|---|
| Cash | 194.2 | 180.5 | 274.5 | 359.5 | 285.0 | -20.7% |
| Short Term Debt | 0.5 | 0.3 | 25.2 | 25.6 | 0.3 | -98.8% |
| Long Term Debt | 0.3 | 0.1 | 0.4 | 0.1 | 0.0 | -100.0% |
Cash flow
|
|---|
| Capex | 11.6 | 23.7 | 12.2 | 11.7 | 74.9 | 540.7% |
Ratios
|
|---|
| Revenue growth | 28.4% | 24.9% | 53.9% | -5.9% | 1.3% | |
| EBITDA growth | 58.1% | 29.4% | 74.3% | -27.1% | 10.3% | |
|
|---|
| Gross Margin | 51.7% | 51.1% | 49.4% | 48.0% | 49.2% | 1.2% |
| EBITDA Margin | 22.8% | 23.6% | 26.8% | 20.7% | 22.6% | 1.8% |
| SG&A, % of revenue | 10.3% | 9.9% | 7.7% | 8.2% | 8.8% | 0.7% |
| Net Income Margin | 15.4% | 16.7% | 19.9% | 14.3% | 18.5% | 4.2% |
| CAPEX, % of revenue | 4.0% | 6.5% | 2.2% | 2.2% | 14.1% | 11.9% |
|
|---|
| ROIC | 19.6% | 22.4% | 32.2% | 18.5% | 19.5% | 1.0% |
| ROE | 15.5% | 18.6% | 28.2% | 16.0% | 19.1% | 3.1% |
| Net Debt/EBITDA | -2.9x | -2.1x | -1.7x | -3.1x | -2.4x | 0.7x |
Silicon Motion Technology Corporation ($SIMO) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 130 | 138 | 139 | 123 | | 2.4% | 4.0% | 8.9% | -9.4% |
| EBITDA | 28 | 37 | 36 | 21 | | -12.7% | 10.5% | 45.4% | 20.9% |
| Net Income | 23 | 31 | 29 | 17 | | -1.9% | 27.9% | 65.9% | 74.8% |
Balance Sheet
|
|---|
| Cash | 342 | 356 | 303 | 285 | | 13.0% | 17.3% | -7.5% | -20.7% |
| Short Term Debt | 21 | 12 | 4 | 0 | | -17.2% | -52.0% | | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | -100.0% |
Ratios
|
|---|
| Gross Margin | 48.0% | 47.5% | 50.9% | 50.3% | | -2.9% | -1.2% | 5.0% | 3.9% |
| EBITDA Margin | 21.8% | 26.6% | 26.0% | 17.0% | | -3.8% | 1.6% | 6.5% | 4.3% |
| Net Income Margin | 17.7% | 22.3% | 21.1% | 14.0% | | -0.8% | 4.2% | 7.2% | 6.8% |
Peers in Semiconductors
Below you can find Silicon Motion Technology Corporation benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 8.5% | 4.4% | 11.0% | 5.0% |
|---|
| Silicon Motion Technology Corporation ($SIMO) | | 24.9% | 53.9% | -5.9% | 1.3% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 47.2% | 49.1% | 51.0% |
|---|
| Silicon Motion Technology Corporation ($SIMO) | 51.7% | 51.1% | 49.4% | 48.0% | 49.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.6% | 11.3% | 9.2% | 10.7% | 9.8% |
|---|
| Silicon Motion Technology Corporation ($SIMO) | 22.8% | 23.6% | 26.8% | 20.7% | 22.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.7% | 4.7% | 4.4% |
|---|
| Silicon Motion Technology Corporation ($SIMO) | 4.0% | 6.5% | 2.2% | 2.2% | 14.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.0% | 3.8% | 1.4% | 3.2% | 3.0% |
|---|
| Silicon Motion Technology Corporation ($SIMO) | 19.6% | 22.4% | 32.2% | 18.5% | 19.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | 0.4x | 0.4x | 0.3x |
|---|
| Silicon Motion Technology Corporation ($SIMO) | -2.9x | -2.1x | -1.7x | -3.1x | -2.4x |
