US stock futures flounder amid tech weakness, Fed caution
TAIPEI - Silicon Motion Technology Corporation (NASDAQ:SIMO), known for its NAND flash controllers for solid state storage devices, today reaffirmed its commitment to its quarterly cash dividend schedule. According to InvestingPro data, the company maintains a strong financial position with more cash than debt and a healthy current ratio of 4.65x, indicating robust liquidity. Analysis suggests the stock is currently trading below its Fair Value. Following the Board of Directors' decision on October 28, 2024, the company will continue to pay an annual dividend of US$2.00 per American Depositary Share (ADS), which translates to US$0.50 per ordinary share, in four equal quarterly installments.
The next installment of US$0.50 per ADS is scheduled for payment on February 27, 2025, to shareholders recorded as of February 13, 2025. The company has maintained dividend payments for 13 consecutive years, with a current yield of 3.69%, demonstrating its commitment to shareholder returns. On the record date, the depository bank’s DR Books will be closed to new issuances and cancellations. The company emphasized that the future declaration and payment of dividends are contingent upon the Board's ongoing determination of their alignment with shareholder interests and compliance with applicable laws and agreements.
Silicon Motion is a leading supplier of SSD controllers across various markets, including servers, PCs, smartphones, IoT devices, and more. With a market capitalization of $1.8 billion and revenue growth of 27.8% in the last twelve months, the company maintains a strong market position. InvestingPro subscribers can access additional insights, including 8 more ProTips and a comprehensive Pro Research Report analyzing the company's competitive position. The company's customer base includes prominent NAND flash vendors, storage device module makers, and OEMs.
This press release statement also contains forward-looking statements regarding market trends and the company's operational, financial, and business prospects. These statements reflect expectations based on current information and are subject to risks and uncertainties that could cause actual results to differ materially. Factors that may influence the company's performance include customer order patterns, economic conditions, cybersecurity threats, U.S.-China trade relations, supply chain disruptions, and product pricing and mix.
Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. For a deeper understanding of Silicon Motion's financial health and growth prospects, investors can access detailed analysis and valuation metrics through InvestingPro's comprehensive research platform. Silicon Motion will not undertake any obligation to update or revise any forward-looking statements outside of required securities laws. The details of the dividend are based on a press release statement from Silicon Motion Technology Corporation.
In other recent news, Silicon Motion Technology Corporation's preliminary fourth-quarter results for 2024 indicate revenue at the lower end of expectations, with non-GAAP gross margin near the midpoint of its previous guidance. The company generated $814.77M in revenue over the last twelve months. Despite weak consumer demand contributing to these results, Silicon Motion's development and implementation of new PCIe Gen 5 and UFS 4 designs are progressing well. Analyst firm Needham maintained its Buy rating on Silicon Motion but reduced the price target to $70 from $75. Another analyst firm, Susquehanna, also maintained a positive rating but lowered the stock's target price from $110 to $95.
In the future, Silicon Motion aims to derive 10% of its total revenue from the automotive market by early 2027 and projects gross margins to return to historical levels of 48% to 50% by early next year. The company is also optimistic about the growth of its eMMC and UFS business, expecting increased market share and product ramps in 2025. However, Needham anticipates that demand for PCs and smartphones will likely remain soft during the first half of 2025, with a potential uptick in demand during the second half of the year. These recent developments highlight Silicon Motion's strategic focus on new technologies and market expansion.
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