SMCI $20 is not the Bottom
Super Micro sells hardware systems that are used to build data servers and storage systems. Demand for Nvidia’s GPU systems has been the primary growth driver for SMCI over the last couple of quarters as customers race to build out their platforms for generative AI. Trailing twelve month revenue comes to 7.4 billion with net income of 600 million. But those figures don’t incorporate the latest guidance. Account for guidance and next year revenue could easily hit 15 billion with net income potentially coming in at 1.2 billion. So Super Micro stock is more realistically valued at around 22 times next year's earnings. Compared to many growth stocks that may sound cheap but for a hardware company it isn’t particularly attractive. Cisco, for example, trades at 21.6 times earnings and Hewlett Packard around 14 times earnings.
Through Wednesday’s close, Super Micro stock has declined 75% from its record closing high of $125 on March 13, according to Dow Jones Market Data. The stock is down 70% since the day it joined the S&P 500, which is the worst performance over the past five years.
THE RISK:
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De-listed in 2018
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Auditor Ran away
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Shorting Army
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Currently, the stock has 20.15% Short Float, with so much pressure the stock is expected to fall.
Shs Outstand: 585.57M
Short Float: 20.15%
These are my personal opinions not Financial advice and I do not hold shares in Super Micro.
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