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Super Micro Computer (SMCI) Suffers a Larger Drop Than the General Market: Key Insights

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The most recent trading session ended with Super Micro Computer (SMCI - Free Report) standing at $960.08, reflecting a -1.66% shift from the previouse trading day's closing. The stock's performance was behind the S&P 500's daily loss of 0.58%. At the same time, the Dow lost 0.12%, and the tech-heavy Nasdaq lost 1.15%.

The server technology company's stock has climbed by 7.17% in the past month, exceeding the Computer and Technology sector's loss of 0.47% and the S&P 500's loss of 1.09%.

The investment community will be paying close attention to the earnings performance of Super Micro Computer in its upcoming release. It is anticipated that the company will report an EPS of $5.97, marking a 266.26% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $4.11 billion, indicating a 219.92% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $22.15 per share and a revenue of $14.76 billion, representing changes of +87.55% and +107.26%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Super Micro Computer. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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 last 30 days, the Zacks Consensus EPS estimate has moved 2.93% higher. At present, Super Micro Computer boasts a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Super Micro Computer has a Forward P/E ratio of 44.09 right now. This indicates a premium in contrast to its industry's Forward P/E of 16.33.

Also, we should mention that SMCI has a PEG ratio of 0.79. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Computer- Storage Devices industry held an average PEG ratio of 1.36.

The Computer- Storage Devices industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 33, this industry ranks in the top 14% of all industries, numbering over 250.

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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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