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

Key Points

• Super Micro Computer's shares fell sharply after the company reported weaker-than-expected quarterly earnings, with a 19.7% decline in stock price from $57.26 to a low of $46.18.
• The company reported earnings per share (EPS) of $0.41, missing analysts' expectations of $0.44, and also recorded revenues of $5.76 billion, below the consensus estimate of $5.88 billion.
• Several analysts have updated their price targets, with a consensus target price of $44.39, reflecting a mix of ratings including three sell ratings and six buy ratings.

Shares of Super Micro Computer, Inc. (NASDAQ:SMCI - Get Free Report) gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $57.26, but opened at $47.33. Super Micro Computer shares last traded at $46.18, with a volume of 27,064,338 shares changing hands.

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

Wall Street Analyst Weigh In

SMCI has been the topic of several analyst reports. JPMorgan Chase & Co. upped their price target on shares of Super Micro Computer from $35.00 to $46.00 and gave the stock a "neutral" rating in a research report on Thursday, July 17th. Barclays reiterated an "equal weight" rating and issued a $34.00 price objective on shares of Super Micro Computer in a report on Tuesday, May 6th. Northland Securities set a $59.00 price target on shares of Super Micro Computer in a research note on Wednesday, May 7th. Rosenblatt Securities decreased their price target on shares of Super Micro Computer from $55.00 to $50.00 and set a "buy" rating on the stock in a research note on Wednesday, May 7th. Finally, Bank of America assumed coverage on shares of Super Micro Computer in a research report on Wednesday, July 9th. They set an "underperform" rating and a $35.00 price objective for the company. 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 given a strong buy rating to the company. According to MarketBeat, Super Micro Computer presently has an average rating of "Hold" and a consensus target price of $44.39.

Insider Buying and Selling

In related news, Director Liang Chiu-Chu Sara Liu sold 300,000 shares of the business's stock in a transaction on Wednesday, June 18th. The stock was sold at an average price of $45.00, for a total transaction of $13,500,000.00. Following the completion of the transaction, the director directly owned 66,903,640 shares of the company's stock, valued at $3,010,663,800. The trade was a 0.45% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CEO Charles Liang sold 300,000 shares of the business's stock in a transaction on Wednesday, June 18th. The stock was sold at an average price of $45.00, for a total value of $13,500,000.00. Following the transaction, the chief executive officer directly owned 66,903,640 shares of the company's stock, valued at $3,010,663,800. The trade was a 0.45% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 1,067,000 shares of company stock worth $53,949,340. 17.60% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Super Micro Computer

Several institutional investors and hedge funds have recently added to or reduced their stakes in SMCI. FMR LLC acquired a new stake in Super Micro Computer during the 4th quarter valued at $292,869,000. Invesco Ltd. lifted its stake in shares of Super Micro Computer by 929.5% during the 4th quarter. Invesco Ltd. now owns 7,542,742 shares of the company's stock worth $229,903,000 after purchasing an additional 6,810,082 shares during the period. Northern Trust Corp lifted its stake in shares of Super Micro Computer by 1,573.8% during the 4th quarter. Northern Trust Corp now owns 4,897,876 shares of the company's stock worth $149,287,000 after purchasing an additional 4,605,260 shares during the period. Marshall Wace LLP lifted its stake in shares of Super Micro Computer by 416,945.0% during the 4th quarter. Marshall Wace LLP now owns 3,753,405 shares of the company's stock worth $114,404,000 after purchasing an additional 3,752,505 shares during the period. Finally, Legal & General Group Plc raised its position in shares of Super Micro Computer by 649.5% in the 4th quarter. Legal & General Group Plc now owns 3,739,323 shares of the company's stock worth $113,975,000 after buying an additional 3,240,401 shares during the period. Institutional investors and hedge funds own 84.06% of the company's stock.

Super Micro Computer Stock Down 19.7%

The company has a current ratio of 6.66, a quick ratio of 3.95 and a debt-to-equity ratio of 0.38. The firm has a market capitalization of $27.45 billion, a PE ratio of 24.07, a price-to-earnings-growth ratio of 2.83 and a beta of 1.46. The firm has a 50-day moving average of $48.30 and a two-hundred day moving average of $41.28.

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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