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Aggressive Growth

Super Micro Computer, Inc. (SMCI - Snapshot Report) is coming off of a record-setting quarter for both sales and net income. Estimates are moving higher, giving the stock a Zacks #1 Rank (Strong Buy).

Shares did move higher on the earnings news, but given the valuations, it is not too late to make a profit on SMCI.

Company Description

Super Micro offers server technology and green computing. The company has customers around the world in need of workstation, blade, storage and other tech systems and services.

Record Top and Bottom Lines

Super Micro just reported second-quarter results on Jan 25 that showed a 32% increase in net sales, to $241 million. Net income jumped 52% to $11.6 million.

Earnings broke down to 28 cents per share, beating the Zacks Consensus Estimate by 6 cents. The company did not update its guidance, as it previously said it wouldn't, but may "at any time."

Estimates Jump

Analysts unanimously raised forecast for the remaining fiscal 2011 and 2012. This year's consensus is up 8 cents, to 94 cents. Projections for next year are up a dime, to $1.19 on average.

In fiscal 2010 Super Micro made 67 cents a share, so the expected annual growth rates are sitting at 40% and 27%, respectively.

And a Value?

Shares of SMCI are trading with attractive valuations as well. The stock is going for less than 15 times forward estimates and with a PEG ratio near 1.0. Also, the price to sales is 0.61, in line with similar companies.

The Chart

Super Micro missed estimates 2 quarters ago; you can see the gap lower all the way to the left of the chart. But estimates and the share price are back on track, working their way higher.

Super Micro Computer, Inc. - ticker SMCI >

 
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Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

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