Information technology hardware maker Super Micro Computer (SMCI) has been having a difficult time during the past two weeks. In fact, shares have lost more than a quarter of their value since the company delayed of its annual report in late August. This was definitely not a good look for SMCI because it happened right after short-seller Hindenburg Research accused the company of accounting manipulation. To make matters worse, earlier today, JPMorgan downgraded SMCI from Overweight to Neutral and cut its price target from $950 to $500 per share.
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Five-star analyst Samik Chatterjee noted that the uncertainty surrounding the company’s compliance has created a “near-term overhang” and advised new investors to stay on the sidelines for now. In addition, he expects Super Micro to respond aggressively to retain customers, which might involve competitive pricing strategies. This could potentially lead to lower profit margins that would put more pressure on the stock price.
It’s worth noting that, so far, Chatterjee has enjoyed a 59% success rate on his stock ratings, with an average return of 10.80% per rating.
Investor Sentiment for SMCI Stock Is Currently Very Positive
Despite JPMorgan’s cautious stance, the sentiment among TipRanks investors is currently very positive. Out of the 747,525 portfolios tracked by TipRanks, 2.9% hold SMCI stock. In addition, the average portfolio weighting allocated towards SMCI among those who do have a position is 6.75%. This suggests that investors of the company are fairly confident about its future.
However, the most important part is that, in the last 30 days, 4% of those holding the stock increased their positions. As a result, the stock’s sentiment is above the sector average, as demonstrated in the following image:
Is SMCI a Good Stock to Buy?
Overall, analysts have a Moderate Buy consensus rating on SMCI stock based on five Buys, five Holds, and one Sell assigned in the past three months. After a 44% rally in its share price over the past year, the average SMCI price target of $978.50 per share implies 153.20% upside potential.
