Silicon Motion Technology Corporation (SIMO) DCF Valuation & Fundamental Primer
Silicon Motion Technology Corporation (SIMO) currently trades at $93.58 with an enterprise value of $5.89B. Our proprietary institutional model rates Silicon Motion Technology Corporation at 91/100 (Grade: A+ · Elite SaaS Compounder). The current market price prices in an implied 5-year revenue CAGR of 7.1% vs. historical growth of 26.6% (Substantial Margin of Safety).
Institutional fundamental teardown of Silicon Motion Technology Corporation (SIMO) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Silicon Motion Technology Corporation (SIMO) 3-Scenario DCF Valuation Range
Stress-test SIMO's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $93.58).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $207.21 +121% | $220.01 +135% | $234.94 +151% | $252.59 +170% | $273.76 +193% |
| 9.3% | $186.48 +99% | $196.56 +110% | $208.14 +122% | $221.57 +137% | $237.33 +154% |
| 10.0% | $169.45 +81% | $177.56 +90% | $186.75 +100% | $197.25 +111% | $209.36 +124% |
| 10.8% | $155.23 +66% | $161.86 +73% | $169.29 +81% | $177.68 +90% | $187.22 +100% |
| 11.5% | $143.17 +53% | $148.67 +59% | $154.78 +65% | $161.60 +73% | $169.28 +81% |
Institutional Software Quality Scorecard (91/100 · Grade A+)
Exceptional unit economics, disciplined equity dilution, and fortress balance sheet.
Elite deferred revenue float; FCF exceeds operating income by >20%
Standard software SBC dilution; modest equity transfer to employees
Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40
Zero-debt fortress balance sheet with abundant net cash liquidity
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 206% of EBIT driven by upfront annual collections
- Top-quartile software unit economics: 79.2% gross margin and 56.3% Rule of 40 score
- Fortress capital structure: Zero debt and $375.7M in pure net cash
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into SIMO?
The current share price only requires 7.1% 5-year CAGR (16.7% dilution-adjusted), well below historical growth of 26.6%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (14.7% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 16.7% 5-year revenue CAGR to justify $93.58/sh on a true per-share economic cash flow basis.
Silicon Motion Technology Corporation (SIMO) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $560.7M | $560.7M | $709.9M | $898.7M | $1.14B | $1.44B | $1.82B |
| Gross Profit | $444.1M | $444.1M | $562.2M | $711.8M | $901.1M | $1.14B | $1.44B |
| Operating Income (EBIT) | $80.7M | $80.7M | $102.2M | $129.4M | $163.8M | $207.4M | $262.6M |
| Stock-Based Compensation (SBC) | $82.4M | $82.4M | $104.4M | $132.1M | $167.3M | $211.7M | $268.1M |
| Unlevered Free Cash Flow (FCF) | $166.5M | $166.5M | $210.8M | $266.9M | $337.9M | $427.8M | $541.6M |
| SBC-Adjusted True Cash Flow | $84.1M | $84.1M | $106.5M | $134.8M | $170.7M | $216.1M | $273.5M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -22.0 + 0.63 × (Rule of 40) · R² = 42%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Silicon Motion Technology Corporation | SIMO | $3.14B | $560.7M | 79.2% | 29.7% | 56.3% | 14.7% | 4.9× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 4.9× | $2.76B | $3.14B | $93.58 | 0.0% |
| -20% Multiple Compression | 3.9× | $2.21B | $2.59B | $77.10 | -20.0% |
| -35% Multiple Compression | 3.2× | $1.80B | $2.17B | $64.75 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $2.80B | $3.18B | $94.75 | +1.4% |
Frequently Asked Questions: Silicon Motion Technology Corporation (SIMO) Valuation
What is Silicon Motion Technology Corporation (SIMO)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Silicon Motion Technology Corporation (SIMO) has a Base Case implied value of $186.75 per share (with a Bear Case of $78.61 and a Bull Case of $349.18), compared to its current price of $93.58. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Silicon Motion Technology Corporation (SIMO)'s Rule of 40 score and Free Cash Flow margin?
Silicon Motion Technology Corporation achieves a Rule of 40 score of 56.3%, combining a 26.6% revenue growth run-rate with a 29.7% TTM free cash flow margin on $560.7M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into SIMO stock according to Reverse-DCF analysis?
At $93.58 per share (Enterprise Value of $2.76B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 7.1%, compared to Silicon Motion Technology Corporation's historical CAGR of 26.6%. Overall market expectations are rated as "Substantial Margin of Safety".
How does Silicon Motion Technology Corporation compare to Software & Cloud Services software peers?
Silicon Motion Technology Corporation (SIMO) earns an institutional Software Quality Score of 91/100 (Grade A+ — Elite SaaS Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Silicon Motion Technology Corporation (SIMO)'s valuation?
Silicon Motion Technology Corporation recorded $82.4M in TTM stock-based compensation (14.7% of revenue). When treating SBC as a cash-equivalent compensation expense, Silicon Motion Technology Corporation's SBC-adjusted free cash flow yield is 2.7%, scoring 16/25 on our Shareholder Dilution Friction pillar.