AI (artificial intelligence) player Super Micro Computer (SMCI) is set to release its Q1 FY25 results on November 5. Wall Street analysts anticipate the company will report earnings of $0.73 per share, reflecting a remarkable 115% year-over-year increase. Additionally, revenues are expected to rise by 205% from the same quarter last year, reaching $6.46 billion, according to data from the TipRanks Forecast page.
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However, despite these positive expectations for Q1, SMCI stock has declined by over 60% in the past six months. This decline was due to several factors, including concerns about the company’s reputation and financial restatements.
Key Events to Watch Ahead of SMCI’s Q1 Earnings
Let’s take a look at a few events that have caused SMCI’s stock to stumble.
On October 30, Super Micro’s auditor, Ernst & Young LLP, stepped down as its registered public accounting firm, stating that it could not rely on the financials provided by the management and Audit Committee and expressing unwillingness to be associated with the firm.
Earlier, in August, prominent short-seller Hindenburg Research accused the company of “accounting manipulation” and other questionable practices. Soon after, Nasdaq issued SMCI a 60-day notice for failing to file its annual report (10-K) on time. Moreover, according to TipRanks’ Bulls Say, Bears Say tool shown below, bears point to ongoing risks, with uncertainties around internal controls and the delayed 10-K filing adding to their caution.
Nevertheless, bullish analysts argue that Supermicro is well-positioned to benefit from rising AI infrastructure investment, supported by its robust product lineup.
Is SMCI a Good Stock to Buy Right Now?
On TipRanks, SMCI stock has a Moderate Buy consensus rating based on three Buys versus six Hold ratings. The average Super Micro Computer price target of $69 implies 137% upside potential from current levels.
