How reliable are SMCI's earnings forecasts historically?

Super Micro Computer (SMCI) has been struggling with earnings forecast reliability, which is a significant concern for investors. The company's historical earnings per share (EPS) have not been stable, as evidenced by the EPS surprise of -0.24 for the latest report period ending on December 31, 2024. This negative surprise indicates that the actual EPS was below the expected value, which raises questions about the accuracy of future earnings forecasts. |code|Ticker|Name|Date|Estimate EPS|EPS Surprise|market_code| |---|---|---|---|---|---|---| |SMCI|SMCI.O|Super Micro Computer|2024 Q3|5.84|0.81|185| |SMCI|SMCI.O|Super Micro Computer|2024 Q4|8.12|-7.61|185| |SMCI|SMCI.O|Super Micro Computer|2025 Q1|0.58||185| |SMCI|SMCI.O|Super Micro Computer|2025 Q2|0.75|-0.24|185| Moreover, analysts' expectations for SMCI's upcoming earnings report reflect a decline in EPS, with a projected EPS of $0.52 for the upcoming quarter, marking a 22.39% year-over-year decline. However, despite this expected decline, the company's revenue is forecasted to surge by 38.58% to reach $5.34 billion compared to the same quarter last year. This discrepancy between EPS trends and revenue growth suggests that SMCI may face challenges in translating increased sales into improved profitability. The Zacks Rank, which SMCI currently holds a Zacks Rank of #4 (Sell), also indicates a lack of upward momentum in earnings estimates. This ranking suggests that analysts are cautious about the company's earnings prospects and may be reflecting the historical volatility and unreliability of SMCI's earnings forecasts. In conclusion, SMCI's historical earnings forecasts are not reliable, as evidenced by the company's recent negative EPS surprise and the expectations of a decline in EPS despite significant revenue growth projections. Investors should approach SMCI's earnings forecasts with caution and consider the potential for future volatility.