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Super Micro Computer (SMCI)
NASDAQ:SMCI
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Super Micro Computer
(NASDAQ:SMCI)69Neutral
Positive Factors
Competitive Advantage
The company's ability to deliver liquid cooling at scale is seen as a competitive advantage, offering a disruptive dynamic in power-constrained data centers.
Geographical Growth
Super Micro's revenue mix has consistently increased towards Europe, showing growth in that geography.
Negative Factors
Customer Concentration Risk
Customer concentration could be a headwind with SMCI's top 2 customers at ~58% of revenues, representing a high customer concentration risk.
Internal Control Weaknesses
Super Micro recently highlighted material internal control weaknesses in their financial reporting, with auditors deeming internal controls as not effective as of June 30, 2024.
Super Micro Computer (SMCI) vs. S&P 500 (SPY)
Market Cap
$22.69B
Dividend YieldN/A
Average Volume (3M)101.51M
Price to Earnings (P/E)16.7
Beta (1Y)3.42
Revenue Growth124.51%
EPS Growth87.78%
CountryUS
Employees5,126
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)2.29
Shares Outstanding593,481,300
10 Day Avg. Volume99,576,918
30 Day Avg. Volume101,512,814
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)N/A
Price to Sales (P/S)2.38
Price to Cash Flow (P/CF)-23.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$50.50Price Target Upside36.86% Upside
Rating ConsensusHold
Number of Analyst Covering10
Super Micro Computer Business Overview & Revenue Model
Company DescriptionSuper Micro Computer, Inc. (SMCI) is a leading provider of high-performance and high-efficiency server technology and products. The company specializes in a range of computing solutions, including server, storage, blade, and workstations, as well as full racks, networking devices, server management software, and technology support and services. Operating in sectors such as enterprise data centers, cloud computing, artificial intelligence, and the Internet of Things (IoT), SMCI is known for its innovation in green computing solutions that prioritize energy efficiency and performance.
How the Company Makes MoneySuper Micro Computer, Inc. makes money primarily through the design, development, and sale of a comprehensive range of server and storage solutions. The company's revenue model includes direct sales to large enterprises, data centers, and cloud providers, as well as through partnerships with system integrators and value-added resellers. Additionally, SMCI generates income from its technology support services and server management software offerings. The company's focus on customizable, energy-efficient products allows it to cater to a diverse client base, which contributes to its revenue growth. Strategic partnerships with technology leaders and a strong emphasis on research and development further enhance its market position and revenue potential.
Super Micro Computer Financial Statement Overview
Summary
Super Micro Computer exhibits strong revenue and profit growth, underpinned by efficient cost management and operational execution. The balance sheet is solid, with low leverage but growing liabilities. Cash flow challenges pose a risk, necessitating careful management to ensure sustainable growth. Overall, the company is on a positive trajectory, with the main concern being cash flow sustainability amidst robust financial health.Income Statement
Super Micro Computer has demonstrated remarkable revenue growth, nearly doubling its total revenue from 2022 to 2024. The gross profit margin and net profit margin are strong, with the latter significantly improving over recent years, reflecting enhanced profitability. EBIT and EBITDA margins are also robust, indicating effective cost management and operational efficiency. Overall, the income statement reflects a strong growth trajectory and profitability enhancement.88
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with a solid equity base, as seen in the rising stockholders' equity. The debt-to-equity ratio remains relatively low, highlighting a conservative leverage approach. However, the equity ratio demonstrates a dip, suggesting increased liabilities. Despite this, the company has improved its return on equity, showcasing effective utilization of shareholder funds. Overall, the balance sheet illustrates financial stability with moderate leverage risk.75
Positive
Cash Flow
The cash flow statements reveal some challenges, primarily with negative operating cash flow and free cash flow over recent periods. This could indicate issues with cash generation despite profitability. However, the company has managed to maintain positive financing cash flow, suggesting reliance on external financing. The free cash flow to net income ratio highlights a disconnect between earnings and cash flow generation. While growth is evident, the cash flow needs careful monitoring to sustain long-term growth.65
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 20.82B | 14.99B | 7.12B | 5.20B | 3.56B | 3.34B | Gross Profit |
| 2.59B | 2.06B | 1.28B | 800.00M | 534.54M | 526.21M | EBIT |
| 1.54B | 1.21B | 761.14M | 335.17M | 92.93M | 58.59M | EBITDA |
| 1.64B | 1.27B | 796.05M | 335.17M | 152.13M | 114.13M | Net Income Common Stockholders |
| 1.44B | 1.15B | 640.00M | 285.16M | 111.86M | 84.31M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 725.76M | 1.67B | 440.56M | 267.70M | 232.27M | 210.53M | Total Assets |
| 5.41B | 9.94B | 3.67B | 3.21B | 2.24B | 1.92B | Total Debt |
| 384.57M | 2.17B | 290.30M | 596.76M | 98.19M | 29.40M | Net Debt |
| -341.09M | 504.38M | -150.16M | 329.37M | -134.08M | -181.13M | Total Liabilities |
| 2.33B | 4.47B | 1.70B | 1.78B | 1.15B | 852.94M | Stockholders Equity |
| 3.08B | 5.47B | 1.97B | 1.43B | 1.10B | 1.07B |
| Cash Flow | Free Cash Flow | ||||
| -2.17B | -2.61B | 626.79M | -485.98M | 64.94M | -74.67M | Operating Cash Flow |
| -1.99B | -2.49B | 663.58M | -440.80M | 122.95M | -30.33M | Investing Cash Flow |
| -243.55M | -194.25M | -39.49M | -46.28M | -58.02M | -43.59M | Financing Cash Flow |
| 2.94B | 3.91B | -448.29M | 522.87M | -44.44M | 23.80M |
Super Micro Computer Technical Analysis
Negative
36.90
Price Trends
36.99
Negative
36.14
Positive
50.85
Negative
Market Momentum
0.07
Positive
44.91
Neutral
13.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMCI, the sentiment is Negative. The current price of 36.9 is below the 20-day moving average (MA) of 45.07, below the 50-day MA of 36.99, and below the 200-day MA of 50.85, indicating a bearish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 44.91 is Neutral, neither overbought nor oversold. The STOCH value of 13.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SMCI.
Super Micro Computer Risk Analysis
Super Micro Computer disclosed 55 risk factors in its most recent earnings report. Super Micro Computer reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Super Micro Computer Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $246.89B | 28.02 | 20.02% | 2.50% | -5.34% | -30.57% | |
71 Outperform | $18.72B | 17.35 | 114.33% | 2.20% | 5.46% | 23.49% | |
69 Neutral | $22.69B | 16.68 | 32.21% | ― | 124.51% | 87.78% | |
67 Neutral | $238.21B | 40.69 | 24.14% | 2.55% | 1.45% | -20.56% | |
67 Neutral | $19.81B | 7.82 | 12.09% | 3.29% | 3.30% | 25.00% | |
66 Neutral | $63.39B | 14.34 | -179.12% | 1.95% | 7.99% | ― | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
SMCI
Super Micro Computer
36.90
-71.12
-65.84%
CSCO
Cisco Systems
62.06
13.38
27.49%
IBM
International Business Machines
256.90
71.41
38.50%
NTAP
NetApp
92.05
-8.94
-8.85%
HPE
Hewlett Packard Enterprise
15.08
-2.48
-14.12%
DELL
Dell Technologies
90.34
-23.81
-20.86%
Super Micro Computer Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -4.43% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While the company reported strong revenue growth and demand for AI platforms, it faced challenges with gross margin pressure, cash flow issues, and a reduction in revenue guidance. The introduction of new products and expansion of production capacity were positive indicators, but financial filing delays have negatively impacted market perception.Highlights
Record Revenue Growth
Preliminary fiscal Q2 net revenue projected between $5.6 billion and $5.7 billion, marking a 54% year-on-year increase.
Strong AI Demand
AI-related platforms contributed over 70% of Q2 revenue, driven by demand for air-cooled and DLC rack-scale AI GPU platforms.
Introduction of New Products
NVIDIA Blackwell products are shipping now, with volume shipments of air-cooled 10U and liquid-cooled 4U NVIDIA B200 HGX systems.
Expansion of Production Capacity
New Malaysia campus will soon ship products, and Taiwan and European production capacity are growing significantly.
Positive Long-term Outlook
Revenue expected to reach $23.5 billion to $25 billion for fiscal year 2025, with potential to reach $40 billion for fiscal year 2026.
Lowlights
Gross Margin Pressure
Q2 non-GAAP gross margin decreased to approximately 11.9% from 13.1% last quarter due to lower margins from product and customer mix.
Cash Flow Challenges
Cash used in operations was approximately $240 million versus cash generated from operations of approximately $409 million in Q1.
Impact of Financial Filing Delays
Negative impacts on cash flow and market perception due to delays in the filing of fiscal year 2024 10-K and 10-Qs.
Revenue Guidance Reduction
Fiscal year 2025 revenue guidance lowered from a range of $26 billion to $30 billion to a new range of $23.5 billion to $25 billion.
Company Guidance
During the Supermicro Second Quarter Fiscal 2025 Business Update Conference Call, the company provided several key financial metrics and future guidance. For the fiscal Q2, net revenue was projected to range between $5.6 billion and $5.7 billion, indicating a 54% year-over-year increase. The non-GAAP gross margin was approximately 11.9%, with a non-GAAP operating margin of 7.9%. The preliminary non-GAAP earnings ranged from $0.58 to $0.60 per share, reflecting a 5% growth compared to the previous year. The company also announced a private placement of $700 million in 2.25% convertible senior notes due in 2028 to support its growth initiatives. Supermicro expects to finish fiscal year 2025 strongly with revenue between $23.5 billion and $25 billion, with potential to reach $40 billion for fiscal year 2026. The company highlighted its transition from Hopper to Blackwell GPUs and ongoing expansion in liquid-cooled data center infrastructure solutions as drivers of future growth.Super Micro Computer Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Super Micro Computer Ends $50M Loan Agreement
Neutral
Dec 27, 2024
Super Micro Computer’s Taiwan subsidiary ended its $50 million Loan Agreement with HSBC Bank’s Taiwan affiliate, which had been fully repaid and undrawn since September 9, 2024. This termination may streamline the company’s financial operations, potentially affecting its liquidity management and stakeholder interests.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.