Super Micro Computer (SMCI) stock whipsawed in out-of-hours trading yesterday as the company said it would likely submit delayed filings in time to avoid delisting by the Nasdaq.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
In a statement accompanying disappointing Fiscal 2025 second quarter results, SMCI said it “believes” it will get its delayed annual filing for last Fiscal year to the Securities and Exchange Commission (SEC) by the February 25th deadline.
SMCI Turbulent as Deadline Nears
Super Micro said it “continues to work diligently” toward that filing and expects to meet the deadline for its annual report as well as its delayed quarterly report for September.
SMCI stock fell over 9% in regular trading ahead of the earnings release and then plunged as much as 19% after the closing bell before jumping over 8% in a volatile after-hours trading session. Ahead of the open on Wall Street on Wednesday the stock traded up around 6% in the premarket session.
Shares have been on a turbulent journey over the last year amid allegations of accounting fraud and delayed submissions to the SEC that have risked the stock being delisted. Coming into yesterday’s earnings update, SMCI was up over 26% year-to-date and rallying 60% in the last week. But SMCI is still down about two-thirds from its March 2024 peak having tumbled as much as 83% over the course of last year.
SMCI Accounting Practices Questioned
SMCI delayed the filing of its last annual report after short-selling firm Hindenburg delivered a scathing attack on the company’s accounting practices last August.
Hindenburg said it uncovered “glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.”
In 2018, Super Micro was temporarily delisted from the Nasdaq for failing to file financial statements. In August 2020, the company was charged by the SEC for “widespread accounting violations,” claims for which it settled for $17.5 million.
A lawsuit filed in April 2024 claimed Super Micro waited just three months after the SEC settlement before restarting “improper revenue recognition.”
Subsequently, SMCI delayed filing its annual report for the last Fiscal year, which placed it at risk of being delisted by Nasdaq. The exchange recently granted the embattled firm an extension to submit the filings by February 25th.
SMCI said that in late 2024, the company received subpoenas from the Department of Justice and the SEC seeking certain documents following the publication of allegations in the Hindenburg report. “The Company is cooperating with these document requests,” it said yesterday.
SMCI “Believes” It Will Make Filing Deadline
In its Q4 earnings update, the company said, “Supermicro continues to work diligently toward the filing of its Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and its Quarterly Report on Form 10-Q for the period ended September 30, 2024. Based on information currently available, the Company believes it will make such filings by February 25, 2025.”
Meanwhile, the company said it expects revenues of $5.6 billion to $5.7 billion for the quarter ended December 31st, below the $5.95 billion expected by Wall Street. It forecasts $23.5 billion to $25 billion in revenue for Fiscal 2025, down from a prior range of $26 billion to $30 billion.
Is SMCI Stock a Good Buy?
Wall Street analysts have a Hold consensus rating on SMCI stock based on two Buys, three Holds, and one Sell assigned in the past three months, The average SMCI price target of $29.75 per share implies a further 23% downside risk. However, it’s worth noting that estimates will likely change following the earnings report.
