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Super Micro Computer (SMCI) Stock Sinks As Market Gains: Here's Why

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Super Micro Computer (SMCI - Free Report) closed at $1,023.29 in the latest trading session, marking a -0.17% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.86%. On the other hand, the Dow registered a gain of 1.22%, and the technology-centric Nasdaq increased by 0.51%.

Prior to today's trading, shares of the server technology company had gained 20.44% over the past month. This has outpaced the Computer and Technology sector's gain of 3.76% and the S&P 500's gain of 2.84% in that time.

Market participants will be closely following the financial results of Super Micro Computer in its upcoming release. The company's earnings per share (EPS) are projected to be $5.64, reflecting a 246.01% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $3.9 billion, up 204.03% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $21.71 per share and a revenue of $14.5 billion, representing changes of +83.83% and +103.51%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Super Micro Computer. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. As of now, Super Micro Computer holds a Zacks Rank of #1 (Strong Buy).

With respect to valuation, Super Micro Computer is currently being traded at a Forward P/E ratio of 47.22. This valuation marks a premium compared to its industry's average Forward P/E of 25.45.

We can also see that SMCI currently has a PEG ratio of 0.85. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computer- Storage Devices stocks are, on average, holding a PEG ratio of 1.41 based on yesterday's closing prices.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 15, finds itself in the top 6% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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