Is Super Micro Computer Stock A Buy Now?

Summary

Super Micro Computer's stock has plummeted 52% in the last quarter and over 60% from its peak, despite a 53% YTD gain. The company's market cap stands at $25.6 billion with a forward PE of 13x. Analysts project robust sales and EPS growth for fiscal 2025 and 2026, yet the stock's valuation remains low amid concerns over delayed 10K filing, Hindenburg Research's short report, and increased competition. The company's growth prospects, particularly in liquid cooling for AI and HPC, could drive future value, but investors should monitor the resolution of current issues.

Takeaways

• 📉 **Stock Performance**: Super Micro Computer's stock has declined significantly, with a 52% drop in the last 3 months and over 60% since the start of the year.
• 📈 **Market Cap and Share Price**: Despite the drop, the company still holds a market cap of $25.6 billion, with shares priced at $436 each.
• 🔍 **Forward PE Ratio**: The forward price-to-earnings (PE) ratio is at 13 times, which is not high, indicating the stock might be undervalued.
• 📊 **Margins and Growth**: Margins are decreasing, but the company is expected to grow quickly with fiscal 2025 sales growth at 88% and EPS growth at 51%.
• 🚫 **Delayed 10K and Hindenburg Research**: The stock has been affected by a delayed 10K filing and a negative short report from Hindenburg Research.
• 💹 **Valuation Metrics**: Forward PE, EV/EBITDA, price-to-sales, and price-to-free-cash-flow are all around the 5-year mean, suggesting the stock is fairly valued.
• 📉 **Analyst Price Target**: The average analyst price target has decreased significantly from $1,033 to $783, indicating an 80% upside potential.
• 📊 **Revenue Growth**: Revenue has seen substantial growth, increasing by 388% over the last six years.
• 📉 **Gross Margin Decline**: Gross profit margin has decreased from a peak of 18.2% to around 14%, negatively impacting the stock's performance.
• 💡 **Blackwell Impact**: The launch of Nvidia's Blackwell platform could open new market opportunities for Super Micro, especially in AI and high-performance computing.
• 💼 **Company Strategy**: Super Micro's success is attributed to its efficient, reliable systems, fast-to-market approach, and building block solutions, especially in liquid cooling technology.

Q & A

How has Super Micro Computer's stock performed in the last 3 months?

Super Micro Computer's stock has declined by 52% in the last 3 months.

What is the current market cap of Super Micro Computer?

The current market cap of Super Micro Computer is $25.6 billion.

What is the forward PE ratio of Super Micro Computer?

The forward PE ratio of Super Micro Computer is currently at 13 times.

What are the analyst estimates for Super Micro Computer's sales growth and EPS growth for fiscal 2025?

For fiscal 2025, analyst estimates predict sales growth of 88% and EPS growth of 51%.

What is the analyst price target for Super Micro Computer as of the latest report?

The latest analyst price target for Super Micro Computer is $783, which represents an approximate 80% upside from the current price.

What factors have contributed to the decline in Super Micro Computer's stock price?

Factors contributing to the decline include delayed 10K filing, a short report by Hindenburg Research, and increased competition from Dell and HP.

How has Super Micro Computer's gross margin changed over the last few years?

Super Micro Computer's gross margin has decreased from a peak of around 18.2% to approximately 14%.

What is the expected timeline for significant Blackwell revenue for Super Micro Computer?

Super Micro Computer does not expect significant Blackwell revenue until the March quarter of the next calendar year.

What is the company's full-year revenue guidance?

Super Micro Computer's full-year revenue guidance is between $26 to $30 billion.

What is the current status of the delayed 10K report for Super Micro Computer?

The CEO of Super Micro Computer has indicated that they do not anticipate any material changes in their fourth quarter or fiscal year 2024 financial results based on the work done so far.

What is the potential impact of Nvidia's Blackwell platform on Super Micro Computer's business?

The launch of Nvidia's Blackwell platform could open new market opportunities, especially in AI and high-performance computing, leading to significant revenue growth expected in the March quarter next year.