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Silicon Motion: A Better Company Than Six Months Ago, But Not a Better Buy

Writer: Brigette Mwaura
Brigette Mwaura
2 days ago
9 min read

Updated: 10 hours ago

Summary

  • I am downgrading Silicon Motion from a STRONG BUY to HOLD. Execution improved, but the prior valuation discount has disappeared and first-half free cash flow remained negative. Silicon Motion reported record Q2 2026 revenue of $451.0Mn, up 32% sequentially and 127% y/y. Non-GAAP EPS of $2.43 beat the $2.13 consensus by 14%. 


  • The operating thesis strengthened. Ferri and enterprise boot-drive solutions reached nearly 30% of revenue, while MonTitan entered commercial production with two tier-one customers.


  • I value the shares at $293 using 21x my FY2027 adjusted EPS estimate of $15.60, discounted one year at 12%. That implies 5.2% upside from the September 28 close of $278.07. 

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Modern glass office building with a Silicon Motion chip logo overlay against a clear blue sky
Source; Silicon Motion

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