A History of Outperforming Analyst Forecasts and Beating the Odds: Super Micro Computer Inc. (SMCI)

Super Micro Computer Inc. (NASDAQ: SMCI) stock fell -7.94% on Friday to $249.26 against a previous-day closing price of $270.77. With 4.56 million shares changed hands, the volume of the stock remained heavier than its average volume of 3.25 million shares. During the session, the Computer Hardware company that operates in wider Technology sector, reached to the highest price of $269.28 whereas the lowest price it dropped to was $247.20. The 52-week range on SMCI shows that it touched its highest point at $357.00 and its lowest point at $50.28 during that stretch. It currently has a 1-year price target of $349.86. Beta for the stock currently stands at 1.29.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SMCI was down-trending over the past week, with a drop of -11.19%, but this was down by -1.76% over a month. Three-month performance surged to 2.19% while six-month performance rose 156.36%. The stock gained 287.17% in the past year, while it has gained 203.61% so far this year. A look at the trailing 12-month EPS for SMCI yields 11.44 with Next year EPS estimates of 19.22. For the next quarter, that number is 3.15. This implies an EPS growth rate of 115.00% for this year and 15.60% for next year. EPS is expected to grow by 10.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 57.30%.

Float and Shares Shorts:

At present, 52.67 million SMCI shares are outstanding with a float of 46.03 million shares on hand for trading. On Aug 30, 2023, short shares totaled 3.5 million, which was 6.67% higher than short shares on Jul 30, 2023. In addition to Mr. Charles Liang as the firm’s Founder, Chairman, Pres & CEO, Mr. David E. Weigand serves as its Sr. VP, CFO, Company Sec. & Chief Compliance Officer.

Institutional Ownership:

Through their ownership of 81.25% of SMCI’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 37.75% of SMCI, in contrast to 35.17% held by mutual funds. Shares owned by individuals account for 17.62%. As the largest shareholder in SMCI with 9.13% of the stake, BlackRock Fund Advisors holds 4,831,531 shares worth 4,831,531. A second-largest stockholder of SMCI, The Vanguard Group, Inc., holds 4,690,866 shares, controlling over 8.87% of the firm’s shares. Disciplined Growth Investors, Inc is the third largest shareholder in SMCI, holding 2,955,521 shares or 5.59% stake. With a 2.79% stake in SMCI, the iShares Core S&P Mid Cap ETF is the largest stakeholder. A total of 1,474,145 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 2.63% of SMCI stock, is the second-largest Mutual Fund holder. It holds 1,393,476 shares valued at 383.32 million. Vanguard Small Cap Index Fund holds 2.20% of the stake in SMCI, owning 1,162,114 shares worth 319.67 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, SMCI reported revenue of $1.64B and operating income of $165.21M. The EBITDA in the recently reported quarter was $169.19M and diluted EPS was $2.60.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SMCI since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With SMCI analysts setting a high price target of $500.00 and a low target of $250.00, the average target price over the next 12 months is $368.63. Based on these targets, SMCI could surge 100.59% to reach the target high and rise by 0.3% to reach the target low. Reaching the average price target will result in a growth of 47.89% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded SMCI stock several times over the past three months with 24 Buys and 16 Sells. In these transactions, 38,682 shares were bought while 10,539 shares were sold. The number of buy transactions has increased to 72 while that of sell transactions has risen to 104 over the past year. The total number of shares bought during that period was 507,006 while 404,487 shares were sold.

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