Why Silicon Motion Technology Stock Is Skyrocketing Today
Key Points
Silicon Motion's sales and earnings in the first quarter breezed by Wall Street's estimates.
The company also issued forward sales guidance that crushed the target.
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Silicon Motion Technology (NASDAQ: SIMO) stock is posting monster gains in Wednesday's trading. The company's share price was up 30.6% as of 12:45 p.m. ET and had been up as much as 40.6% earlier in the session.
Silicon Motion published its first-quarter results before the market opened this morning and reported results that crushed the market's expectations. Sales and earnings far exceeded Wall Street's forecasts, and the company issued encouraging commentary on the state of the business.
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Silicon Motion just served up a blockbuster quarter
Silicon Motion recorded non-GAAP (adjusted) earnings per share of $1.58 on sales of $342.1 million, dramatically outperforming the average Wall Street estimate's call for per-share earnings of $1.30 on sales of roughly $299.6 million. Compared to the prior-year quarter, the company's revenue was up 105.5%. Meanwhile, adjusted earnings per share were up approximately 163% year over year. It was a blowout quarter for the company, and investors are rewarding the stock today.
What's next for Silicon Motion?
In addition to Q1 results that came in far better than anticipated, Silicon Motion also issued guidance that crushed expectations. Management's midpoint guidance for the current quarter calls for sales of roughly $402 million -- far ahead of the previous average analyst estimate's call for sales of $307 million in the period. Silicon Motion is benefiting from very high demand in the memory and storage markets, and the company looks poised to continue benefiting from these trends in the near term.
Should you buy stock in Silicon Motion Technology right now?
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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