Here's What to Expect From Super Micro Computer's Next…

Here's What to Expect From Super Micro Computer's Next Earnings Report

With a market cap of $2.6 billion, Super Micro Computer, Inc. (SMCI) specializes in high-performance server and storage solutions. It designs and manufactures energy-efficient, application-optimized systems based on modular, open x86 architecture for data centers, cloud computing, AI, and 5G markets. The San Jose, California-based company is expected to release its fiscal Q1 earnings results on Wednesday, Nov. 6.

Ahead of this event, analysts project the AI server maker to report a profit of $0.51 per share, reflecting an increase of 82.1% from $0.28 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in two of the last four quarters while missing on two other occasions. In the most recent quarter, SMCI missed the consensus EPS estimate by 27.6%.

For fiscal 2025, analysts forecast SMCI to report EPS of $2.85, up 41.8% from $2.01 in fiscal 2023.

In 2024, Super Micro Computer climbed 60.7%, outperforming the broader S&P 500 Index's ($SPX) 21.8% gain and the Technology Select Sector SPDR Fund's (XLK) 19.4% increase on a YTD basis.

Super Micro Computer stock closed over 20% lower following its Q4 earnings release on Aug. 6 primarily due to a significant decline in gross margin, which fell from 17% to 11.2%, indicating rising input costs that the company could not pass on to customers. Despite a 144% revenue increase to $5.3 billion that met analyst estimates, SMCI reported weaker-than-expected adjusted EPS of $6.25. Additionally, while the company projected strong revenue growth for fiscal 2025, the adjusted earnings forecast was slightly below analyst expectations, fueling further skepticism among investors.

However, the stock surged 15.8% on Oct. 7 due to an update indicating robust sales of its server systems, particularly its liquid cooling solutions, with over 2,000 liquid-cooled server racks shipped since June and a projected deployment of more than 100,000 GPUs for AI applications.

Analysts' consensus view on Super Micro Computer stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 13 analysts covering the stock, four suggest a "Strong Buy," one gives a "Moderate Buy," seven recommend a "Hold," and one provides a "Strong Sell" rating. This configuration is less bullish than three months ago, with seven analysts suggesting a "Strong Buy." As of writing, SMCI is trading below the average analyst price target of $72.81.

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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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