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For the fiscal fourth quarter, the company expects revenues between $5.1 billion and $5.5 billion. The Zacks Consensus Estimate for the same is pegged at $5.3 billion, indicating growth of 142.6% from the year-ago quarter’s reported value.
Super Micro Computer expects non-GAAP earnings per share between $7.62 and $8.42. The Zacks Consensus Estimate for earnings is pegged at $8.08 per share, suggesting a rise of 130.2% from the year-ago reported figure. The figure has been unchanged over the past 30 days.
Image Source: Zacks Investment Research
SMCI has an impressive earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 15.05%. Its earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.96%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Super Micro Computer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Super Micro Computer has been capitalizing on the current AI boom on the back of robust demand for its server and storage solutions. Especially, growing OEM component orders have been leading to a spike in the uptake of its AI servers. This is expected to have been a tailwind for the company in the quarter under review.
SMCI’s strong investments in high-quality, optimized Direct Liquid Cooling (DLC) solutions for high-end applications are anticipated to have benefited the quarterly performance.
The company’s strengthening manufacturing capabilities to support growth of AI and enterprise rack-scale liquid-cooled solutions, and capitalize on the rising demand for liquid-cooled data centers are likely to have been positives.
Super Micro Computer’s solid traction across top-tier data centers, emerging cloud service providers, enterprise/channel, and edge/IoT/telco customers, owing to its robust next-generation AI and CPU platforms, is expected to have been a positive.
SMCI’s robust building block architecture and operation/production automation systems, offering optimized rack-scale solutions with time-to-market and quality advantages to its customers, are expected to have been other tailwinds.
These factors are expected to have aided the performance of Super Micro Computer’s Server & Storage Systems segment.
Also, the company’s robust portfolio of infrastructure solutions for 5G and telecom workloads on the back of its continuing partnership with NVIDIA (NVDA - Free Report) is likely to have contributed well to the segment’s top-line growth in the fiscal fourth quarter.
The Zacks Consensus Estimate for Server & Storage System revenues is pegged at $5.02 billion, indicating a significant jump of 147% from the year-ago quarter’s reported figure.
Strong momentum across its H100-based systems and AI inferencing systems are likely to have boosted the performance of the Subsystems & Accessories segment in the fiscal fourth quarter.
The Zacks Consensus Estimate for fourth-quarter fiscal 2024 Subsystems and accessories revenues is pegged at $281 million, indicating a rise of 83.7% from the year-ago quarter’s reported figure.
Price Performance & Valuation
Super Micro Computer’s shares have gained 119.8% on a year-to-date basis, outperforming the industry, the Zacks Computer & Technology sector and the S&P 500 index’s rise of 47.7%, 14.3% and 12.4%, respectively.
The company has also outpaced the 9.3% and 52.3% rallies of its peers Western Digital (WDC - Free Report) and Pure Storage (PSTG - Free Report) , respectively, in the year-to-date period.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Now, let us look at the value that Super Micro Computer offers to its investors at current levels.
Currently, SMCI is trading at a premium with a trailing 12-month P/E of 18X compared with the industry’s 17.92X, reflecting a slightly stretched valuation at present.
Image Source: Zacks Investment Research
Investment Thesis
Super Micro Computer’s diverse business model, which encompasses Graphics Processing Units, AI, core computing, storage, 5G telco, edge and Internet of Things solutions, is expected to drive its long-term prospects. Its expanding pipeline of AI-backed software solutions positions it well to capitalize on the ongoing AI boom.
However, near-term macroeconomic uncertainties and supply-chain challenges, especially in DLC-related components, are concerning for the company. High inflation, geo-political tensions and rising competition do not bode well.
Given the combination of both risks and rewards, we suggest the existing SMCI shareholders maintain their positions. However, new investors may consider waiting for a more favorable entry point for Super Micro Computer.
Image: Bigstock
How to Play Super Micro Computer (SMCI) Stock Before Q4 Earnings?
Super Micro Computer (SMCI - Free Report) is scheduled to report fourth-quarter fiscal 2024 results on Aug 6.
For the fiscal fourth quarter, the company expects revenues between $5.1 billion and $5.5 billion. The Zacks Consensus Estimate for the same is pegged at $5.3 billion, indicating growth of 142.6% from the year-ago quarter’s reported value.
Super Micro Computer expects non-GAAP earnings per share between $7.62 and $8.42. The Zacks Consensus Estimate for earnings is pegged at $8.08 per share, suggesting a rise of 130.2% from the year-ago reported figure. The figure has been unchanged over the past 30 days.
Image Source: Zacks Investment Research
SMCI has an impressive earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 15.05%. Its earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.96%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Super Micro Computer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Super Micro Computer has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Factors to Consider
Super Micro Computer has been capitalizing on the current AI boom on the back of robust demand for its server and storage solutions. Especially, growing OEM component orders have been leading to a spike in the uptake of its AI servers. This is expected to have been a tailwind for the company in the quarter under review.
SMCI’s strong investments in high-quality, optimized Direct Liquid Cooling (DLC) solutions for high-end applications are anticipated to have benefited the quarterly performance.
The company’s strengthening manufacturing capabilities to support growth of AI and enterprise rack-scale liquid-cooled solutions, and capitalize on the rising demand for liquid-cooled data centers are likely to have been positives.
Super Micro Computer’s solid traction across top-tier data centers, emerging cloud service providers, enterprise/channel, and edge/IoT/telco customers, owing to its robust next-generation AI and CPU platforms, is expected to have been a positive.
SMCI’s robust building block architecture and operation/production automation systems, offering optimized rack-scale solutions with time-to-market and quality advantages to its customers, are expected to have been other tailwinds.
These factors are expected to have aided the performance of Super Micro Computer’s Server & Storage Systems segment.
Also, the company’s robust portfolio of infrastructure solutions for 5G and telecom workloads on the back of its continuing partnership with NVIDIA (NVDA - Free Report) is likely to have contributed well to the segment’s top-line growth in the fiscal fourth quarter.
The Zacks Consensus Estimate for Server & Storage System revenues is pegged at $5.02 billion, indicating a significant jump of 147% from the year-ago quarter’s reported figure.
Strong momentum across its H100-based systems and AI inferencing systems are likely to have boosted the performance of the Subsystems & Accessories segment in the fiscal fourth quarter.
The Zacks Consensus Estimate for fourth-quarter fiscal 2024 Subsystems and accessories revenues is pegged at $281 million, indicating a rise of 83.7% from the year-ago quarter’s reported figure.
Price Performance & Valuation
Super Micro Computer’s shares have gained 119.8% on a year-to-date basis, outperforming the industry, the Zacks Computer & Technology sector and the S&P 500 index’s rise of 47.7%, 14.3% and 12.4%, respectively.
The company has also outpaced the 9.3% and 52.3% rallies of its peers Western Digital (WDC - Free Report) and Pure Storage (PSTG - Free Report) , respectively, in the year-to-date period.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Now, let us look at the value that Super Micro Computer offers to its investors at current levels.
Currently, SMCI is trading at a premium with a trailing 12-month P/E of 18X compared with the industry’s 17.92X, reflecting a slightly stretched valuation at present.
Image Source: Zacks Investment Research
Investment Thesis
Super Micro Computer’s diverse business model, which encompasses Graphics Processing Units, AI, core computing, storage, 5G telco, edge and Internet of Things solutions, is expected to drive its long-term prospects. Its expanding pipeline of AI-backed software solutions positions it well to capitalize on the ongoing AI boom.
However, near-term macroeconomic uncertainties and supply-chain challenges, especially in DLC-related components, are concerning for the company. High inflation, geo-political tensions and rising competition do not bode well.
Given the combination of both risks and rewards, we suggest the existing SMCI shareholders maintain their positions. However, new investors may consider waiting for a more favorable entry point for Super Micro Computer.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.