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Super Micro Computer (SMCI) Gains As Market Dips: What You Should Know

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Super Micro Computer (SMCI - Free Report) closed at $274.22 in the latest trading session, marking a +1.8% move from the prior day. This change outpaced the S&P 500's 0.27% loss on the day. Meanwhile, the Dow lost 0.47%, and the Nasdaq, a tech-heavy index, added 0.14%.

Coming into today, shares of the server technology company had lost 2.07% in the past month. In that same time, the Computer and Technology sector lost 2.58%, while the S&P 500 lost 2.86%.

Investors will be hoping for strength from Super Micro Computer as it approaches its next earnings release. In that report, analysts expect Super Micro Computer to post earnings of $3.19 per share. This would mark a year-over-year decline of 6.73%. Our most recent consensus estimate is calling for quarterly revenue of $2.07 billion, up 11.58% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $15.54 per share and revenue of $9.76 billion, which would represent changes of +31.58% and +36.95%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Super Micro Computer. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Super Micro Computer currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, Super Micro Computer currently has a Forward P/E ratio of 17.33. This represents a discount compared to its industry's average Forward P/E of 20.17.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 78, which puts it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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