Why Super Micro Computer (SMCI) Dipped More Than Broader Market Today

In the latest close session, Super Micro Computer (SMCI) was down 2.8% at $30.90. This change lagged the S&P 500's 1.52% loss on the day. Elsewhere, the Dow lost 1.56%, while the tech-heavy Nasdaq lost 1.78%.

Prior to today's trading, shares of the server technology company had lost 0.78% was narrower than the Computer and Technology sector's loss of 1.66% and the S&P 500's loss of 2.25%.

Investors will be eagerly watching for the performance of Super Micro Computer in its upcoming earnings disclosure. The company is expected to report EPS of $0.63, up 103.23% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $12.34 billion, up 168.31% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.2 per share and a revenue of $41.14 billion, indicating changes of +6.8% and +87.23%, respectively, from the former year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Super Micro Computer. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.36% lower. Super Micro Computer is currently a Zacks Rank #3 (Hold).

In terms of valuation, Super Micro Computer is presently being traded at a Forward P/E ratio of 14.47. This valuation marks no noticeable deviation compared to its industry average Forward P/E of 14.47.

We can also see that SMCI currently has a PEG ratio of 0.51. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Computer- Storage Devices industry was having an average PEG ratio of 1.35.

The Computer- Storage Devices industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 23, this industry ranks in the top 10% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Zacks Names #1 Semiconductor Stock

This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.

With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.

See This Stock Now for Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research