Super Micro Computer’s Earnings Anticipation Amidst Stock Drop
San Jose, California-based Super Micro Computer, Inc. (SMCI) specializes in creating high-performance server and storage solutions built on modular and open architecture. The company currently holds a market capitalization of $18.6 billion and operates across the United States, Europe, Asia, and beyond.
Upcoming Earnings Report and Predictions
Investors eagerly await Super Micro’s second-quarter earnings report on Monday, February 3. Analysts anticipate that SMCI will reveal a non-GAAP profit of $0.54 per share, representing a 5.9% increase from the $0.51 per share posted in the same quarter last year. The company has generally performed well, surpassing analysts’ bottom-line expectations in two out of the last three quarters, though it missed the mark once. Notably, Super Micro has yet to file its previous quarters’ 10-Q forms.
Future Earnings Projections
For fiscal 2025, analysts forecast an adjusted EPS of $2.17 for SMCI, marking an 8% rise from the $2.01 recorded in fiscal 2024. Projections for fiscal 2026 suggest a 9.7% increase, with expected earnings of $2.38.
Stock Performance Analysis
Over the past year, SMCI stock has increased by 18.8%, which lags behind the Technology Select Sector SPDR Fund’s (XLK) growth of 27.1% and the S&P 500 Index’s ($SPX) returns of 26.3% during the same period.
Challenges Impacting Stock Price
Super Micro Computer began the year strongly, with its stock peaking at an all-time high of $122.90 in early March. However, a substantial decline of 72.9% followed this peak. This drop is largely attributed to the company’s failure to submit its Form 10-K for the fiscal year ending June 30, 2024, as well as its Form 10-Q for Q1 2025, amidst ongoing corporate governance issues.
The situation worsened after the preliminary Q1 financial information release on November 5, where SMCI’s stock plummeted by 18.1%. The company projected its Q1 net sales to fall between $5.9 billion and $6 billion, missing analysts’ estimated $6.5 billion. Despite showing a remarkable 182% year-over-year growth, the Q2 guidance also came in below Wall Street’s expectations, and the lack of a timeline for the 10-K filing further diminished investor trust.
Analyst Sentiment
Analysts are currently taking a cautious view on SMCI’s future, with a consensus rating of “Hold.” Of the 12 analysts following the stock, two recommend a “Strong Buy,” one suggests a “Moderate Buy,” while seven advocate “Hold,” and two propose a “Strong Sell.” The average price target is set at $50.59, which indicates a potential upside of 51.8% from current price levels.
On the date of publication, Aditya Sarawgi did not hold positions in any of the securities mentioned in this article. All information in this article is for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views expressed here are those of the author and do not necessarily reflect those of Nasdaq, Inc.
