Super Micro Computer (NASDAQ:SMCI) Shares Down 20.3% on Disappointing Earnings

Key Points

• Super Micro Computer's shares dropped 20.3% after announcing quarterly earnings that were below expectations, with earnings per share of $0.41 compared to the anticipated $0.44.
• The company reported revenue of $5.76 billion for the quarter, which fell short of analyst estimates of $5.88 billion, but still represented an 8.5% increase year-over-year.
• Following the earnings report, various brokerage firms adjusted their ratings and target prices, with an average rating of "Hold" and a consensus target price of $44.39 for the stock.

Super Micro Computer, Inc. (NASDAQ:SMCI - Get Free Report)'s share price fell 20.3% on Wednesday after the company announced weaker than expected quarterly earnings. The company traded as low as $45.16 and last traded at $45.61. 49,541,080 shares were traded during trading, a decline of 13% from the average session volume of 56,868,738 shares. The stock had previously closed at $57.26.

The company reported $0.41 earnings per share for the quarter, missing the consensus estimate of $0.44 by ($0.03). The firm had revenue of $5.76 billion during the quarter, compared to analyst estimates of $5.88 billion. Super Micro Computer had a net margin of 5.61% and a return on equity of 20.41%. The business's revenue was up 8.5% compared to the same quarter last year. During the same period in the prior year, the firm earned $6.25 earnings per share.

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on SMCI. Raymond James Financial began coverage on Super Micro Computer in a report on Wednesday, June 25th. They set an "outperform" rating on the stock. Mizuho boosted their target price on Super Micro Computer from $40.00 to $47.00 and gave the stock a "neutral" rating in a research report on Thursday, July 3rd. Northland Securities set a $59.00 target price on Super Micro Computer in a research note on Wednesday, May 7th. Citigroup reissued a "neutral" rating and issued a $52.00 target price (up from $37.00) on shares of Super Micro Computer in a report on Friday, July 11th. Finally, JPMorgan Chase & Co. increased their price objective on Super Micro Computer from $35.00 to $46.00 and gave the company a "neutral" rating in a research report on Thursday, July 17th. Three equities research analysts have rated the stock with a sell rating, eight have issued a hold rating, six have assigned a buy rating and one has assigned a strong buy rating to the company's stock. According to MarketBeat, Super Micro Computer presently has an average rating of "Hold" and a consensus price target of $44.39.

Insider Activity at Super Micro Computer

In other news, CFO David E. Weigand sold 67,000 shares of the business's stock in a transaction on Tuesday, May 20th. The shares were sold at an average price of $44.02, for a total transaction of $2,949,340.00. Following the completion of the sale, the chief financial officer owned 88,599 shares of the company's stock, valued at $3,900,127.98. The trade was a 43.06% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, Director Liang Chiu-Chu Sara Liu sold 200,000 shares of the stock in a transaction that occurred on Monday, July 28th. The shares were sold at an average price of $60.00, for a total transaction of $12,000,000.00. Following the sale, the director directly owned 40,426,120 shares of the company's stock, valued at $2,425,567,200. The trade was a 0.49% decrease in their position. The disclosure for this sale can be found here. Insiders sold 1,067,000 shares of company stock valued at $53,949,340 over the last 90 days. Corporate insiders own 17.60% of the company's stock.

Hedge Funds Weigh In On Super Micro Computer

Institutional investors and hedge funds have recently bought and sold shares of the business. Robeco Institutional Asset Management B.V. acquired a new stake in Super Micro Computer in the 1st quarter valued at about $5,408,000. Gibraltar Capital Management Inc. acquired a new position in shares of Super Micro Computer during the first quarter worth approximately $205,000. Sequoia Financial Advisors LLC grew its position in Super Micro Computer by 43.2% in the first quarter. Sequoia Financial Advisors LLC now owns 19,243 shares of the company's stock valued at $659,000 after acquiring an additional 5,804 shares during the period. Capital Advisors Inc. OK lifted its stake in shares of Super Micro Computer by 39.8% during the first quarter. Capital Advisors Inc. OK now owns 47,251 shares of the company's stock valued at $1,618,000 after acquiring an additional 13,451 shares during the period. Finally, Nuveen Asset Management LLC boosted its holdings in Super Micro Computer by 796.5% during the fourth quarter. Nuveen Asset Management LLC now owns 1,446,722 shares of the company's stock worth $44,096,000 after buying an additional 1,285,355 shares during the last quarter. 84.06% of the stock is currently owned by institutional investors and hedge funds.

Super Micro Computer Stock Performance

The firm has a market cap of $27.09 billion, a price-to-earnings ratio of 23.99, a price-to-earnings-growth ratio of 2.83 and a beta of 1.46. The stock has a 50-day moving average of $48.30 and a 200-day moving average of $41.28. The company has a debt-to-equity ratio of 0.38, a quick ratio of 3.95 and a current ratio of 6.66.

Super Micro Computer Company Profile

Super Micro Computer, Inc, together with its subsidiaries, develops and manufactures high performance server and storage solutions based on modular and open architecture in the United States, Europe, Asia, and internationally. Its solutions range from complete server, storage systems, modular blade servers, blades, workstations, full racks, networking devices, server sub-systems, server management software, and security software.

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