Should You Consider Putting Your Money on Super Micro Computer, Inc. (SMCI), the Most-Viewed Stock?
Lately, Super Micro Computer (SMCI) has been garnering significant attention as one of the most-viewed stocks , prompting us to assess various factors that could impact its immediate stock performance.
In the past month, this server technology firm’s shares have delivered a return of +10.1%, outpacing the Zacks S&P 500 composite’s +4.1% change. During that same period, the Zacks Computer- Storage Devices industry, where Super Micro belongs, saw a 3.8% increase. The pivotal query now is: Could we predict the future trajectory of the stock?
Market trends may often be dictated by media releases or rumors about significant business prospect alterations, but the primary controlling factors are fundamental truths that influence long-term investment decisions.
Examining Earnings Estimate Revisions
Super Micro, in the current quarter, is projected to report earnings of $8.08 per share, a significant +130.2% change from the same quarter last year, with the Zacks Consensus Estimate remaining unchanged for the last 30 days.
The consensus earnings estimate for the current fiscal year stands at $23.82, reflecting a change of +101.7% from the previous year. Similarly, for the upcoming fiscal year, the consensus earnings estimate of $34.31 points to a +44.1% change.
The Zacks Rank, leveraging the power of earnings estimate revisions, provides a holistic view of a stock’s short-term price direction. Given recent changes in the consensus estimate and three other earnings-related factors, Super Micro currently holds a Zacks Rank #3 (Hold).
Projected Revenue Growth
Understanding a company’s potential revenue growth is crucial as earnings growth is typically linked to revenue increase. Super Micro’s consensus sales estimate for the current quarter is $5.3 billion, a +142.6% change year-on-year. The estimates for the current and upcoming fiscal years at $14.93 billion and $23.92 billion, respectively, indicate changes of +109.7% and +60.1%.
Recent Performance and Surprise History
In the last reported quarter, Super Micro posted revenues of $3.85 billion, a year-over-year change of +200%, with an EPS of $6.65 as compared to $1.63 from the previous year.
The reported revenues represented a surprise of -2.89% compared to the Zacks Consensus Estimate of $3.96 billion, with an EPS surprise of +15.05%. Over the past four quarters, the company consistently exceeded consensus EPS estimates and thrice beat consensus revenue estimates.
Valuation Considerations
Assessing a stock’s valuation is fundamental to any investment decision, and it’s critical to ensure the current price accurately mirrors the inherent business value and growth prospects.
Super Micro is rated D on the Zacks Value Style Score, which evaluates various traditional and unconventional valuation metrics, suggesting that it is trading at a premium relative to its industry peers.
In Conclusion
While the buzz around Super Micro is certainly interesting, its Zacks Rank #3 implies that it may potentially perform in line with the overall market in the near future.
*This AI article reflects Zacks research.*
