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While the historical EPS growth rate for Silicon Motion is 3.2%, investors should actually focus on the projected growth. The company's EPS is expected to grow 22.2% this year, crushing the industry average, which calls for EPS growth of 1.1%.
Impressive Asset Utilization Ratio" Impressive Asset Utilization Ratio
Growth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric exhibits how efficiently a firm is utilizing its assets to generate sales.
Right now, Silicon Motion has an S/TA ratio of 0.71, which means that the company gets $0.71 in sales for each dollar in assets. Comparing this to the industry average of 0.64, it can be said that the company is more efficient.
In addition to efficiency in generating sales, sales growth plays an important role. And Silicon Motion looks attractive from a sales growth perspective as well. The company's sales are expected to grow 20.4% this year versus the industry average of 2.6%.
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Promising Earnings Estimate Revisions" ">Promising Earnings Estimate Revisions
The current-year earnings estimates for Silicon Motion have been revising upward. The Zacks Consensus Estimate for the current year has surged 1.2% over the past month.