Supermicrocomputer today
Super Micro Computer
(As of 11/25/2024 ET)
- 52 week range
- $17.25
▼
$122.90
- P/E ratio
- 19.28
- Target price
- $66.89
Super Micro Computer NASDAQ: SMCI helped ease market fears by announcing the appointment of a new auditor and stemming the fall in share prices. BDO USA is part of a global franchise that ranks among the top five accounting firms in the world, so its endorsement will carry weight. The only question is when she will make her first statements and what they will say. Critical details will concern accounting methods and how they affect reliable sales and profit prospects.
Super Micro is central to the AI revolution by providing the most advanced data center infrastructure built on NVIDIA NASDAQ: NVDA GPUs and CPUs. Its liquid-cooled rack-mount server systems help data centers reduce operating costs by approximately 40%, which is important as semiconductor technology becomes more powerful with each generation, and GPU clusters and data centers built around them become increasingly more and more. . The latest power plants are estimated to consume as much energy as a small city. Demand for NVDA products has increased significantly and is expected to exceed support over the next few quarters, matching the same demand for Super Micro Computer.
Super Micro updated market forecast for F2025
Super Micro Computer shares are down 75% from their highs and are deeply undervalued. The share price is at the end of 2023 before the AI bubble burst, which does not take into account any AI-related gains. Assuming the shares were fairly priced back then, their business is worth much more today, regardless of any adjustments to the financial statements. Artificial intelligence is now present and driving growth and cash flow. The last quarter reported was the fourth quarter of 2024, which included sales growth of 143% and adjusted earnings nearly doubling, with growth expected to continue into 2025. Such growth deserves greater praise; this stock trades with a price multiple of around a few tens of dollars.
Super Micro Computer MarketRank™ Stock Analysis
- Overall MarketRank™
- 94th percentile
- Analyst rating
- Hold
- Pros/Cons
- 74.2% Growth potential
- Short interest level
- Healthy
- Dividend Power
- N/A
- Environmental assessment
- -1.86
- Mood News
- 0.63
- Insider trading
- N/A
- Project Profit Growth
- N/A
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Super Micro has not yet submitted its F2024 annual report, but plans to do so soon. Official first-quarter results were also late, but the company released a preliminary report that changed the market outlook, paving the way for share prices to rise after the earnings release. He trimmed his revenue forecast, matching the high end with the previous low, and narrowed his profit forecast, forecasting triple-digit growth for another quarter.
Super Micro’s preliminary numbers were smaller than the market expected, but support the idea that the company is undervalued, with shares trading under $30, revenue up 180% year-over-year (YoY) and earnings almost doubled. The second-quarter guidance was similarly tepid in terms of market expectations, but no less robust compared to the prior year, which is another reason to believe the stock is undervalued. The second-quarter outlook includes slower YoY growth as competition intensifies, but growth is expected to remain above 60% and is likely to be cautious given industry trends.
NVIDIA’s latest results show its business growth slowing but maintaining high double-digit rates, ahead of analysts’ forecasts and expectations. The data center segment, the most telling indicator for SMCI investors, grew more than 100% in the third quarter of 2024. Super Micro Computer is not the only server maker using NVIDIA chips, but it is a significant one. It’s on the list of clients widely mentioned by NVIDIA on the call, so performance outperformance is likely. Not to mention, Super Micro executives have reason to be cautious; setting the bar too high and not meeting your targets will hurt the stock price.
Analysts Hold Super Micro Computer Shares: Expect Volatility
Analyst sentiment has weakened since the start of 2024 due to accounting issues, but they continue to hold the stock and show some confidence in the rating. MarketBeat tracks 17 analysts, with 88% rated Hold or better, nearly 25% rated Buy and just two rated Sell. Susquehanna and JPMorgan Chase issued two sell-equivalent ratings that set a low price target of $23. Susquehanna’s $32 target coincides with the critical support level at which SMCI stock traded in late November; the consensus 2024 price target is trending lower but implies more than 100% upside to the critical support target.
Super Micro’s share price has fallen sharply over the past year as the AI bubble burst, analyst sentiment soured and short sellers rushed in. However, the market bottomed out at the end of 2024 and is poised to move higher if accounting issues are resolved. The short interest rate remains high at almost 17% and may continue to weigh on the price, but recent data shows it is easing and increasing the market’s rally. Positive accounting results will boost short covering and possibly trigger a short squeeze. The critical support target is around $28 and is showing strong support at that level with a significant jump in volume.
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