Super Micro Computer (NASDAQ:SMCI) Stock Price Down 2.8% – Should You Sell?

Super Micro Computer, Inc. (NASDAQ:SMCI)’s stock price traded down 2.8% during trading on Tuesday. The stock traded as low as $27.13 and last traded at $27.79. 45,404,110 shares changed hands during mid-day trading, an increase of 4% from the average daily volume of 43,651,523 shares. The stock had previously closed at $28.60.

Recent Super Micro Computer Headlines

These are some of the SMCI headlines that stood out recently:

• Positive Sentiment: Recent quarterly results were strong: revenue reached $19.95 billion, up 297.5% year over year, and adjusted earnings per share of $1.81 beat the cited consensus estimate of $1.28. Zacks also upgraded SMCI to “strong buy,” offering a supportive analyst signal. Article: Buy 3 Top-Ranked Undervalued AI Infrastructure Giants
• Negative Sentiment: Reports say federal prosecutors are investigating whether entities linked to Alice Huang were involved in efforts to smuggle Supermicro products into China. The reports describe an investigation, not a finding of wrongdoing, but the scrutiny raises potential legal, compliance and export-control concerns for the server maker. Article: Why is SMCI stock falling on Thursday?
• Negative Sentiment: Investors are also weighing weak cash conversion: despite the revenue surge, operating cash flow was reported at negative $434 million, with receivables and inventory absorbing cash. That adds working-capital risk to the regulatory concerns. Article: Super Micro Computer Stocks Fall as Cash Drain Shadows Fourfold Sales Jump

Wall Street Analysts Forecast Growth

Several brokerages have recently weighed in on SMCI. Susquehanna reaffirmed a “negative” rating and set a $18.00 target price (up from $15.00) on shares of Super Micro Computer in a research note on Tuesday. Bank of America raised their target price on shares of Super Micro Computer from $38.00 to $39.00 and gave the stock an “underperform” rating in a research note on Wednesday, November 4th. Mizuho boosted their target price on Super Micro Computer from $35.00 to $43.00 and gave the stock a “neutral” rating in a report on Tuesday, October 6th. Weiss Ratings restated a “hold (c)” rating on shares of Super Micro Computer in a research report on Monday, September 21st. Finally, Rosenblatt Securities reaffirmed a “buy” rating and issued a $57.00 price target on shares of Super Micro Computer in a report on Wednesday, November 4th. One equities research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating, eleven have given a Hold rating and three have issued a Sell rating to the company. Based on data from MarketBeat, Super Micro Computer currently has a consensus rating of “Hold” and an average price target of $41.29.

Super Micro Computer Stock Performance

The company has a debt-to-equity ratio of 0.56, a quick ratio of 1.66 and a current ratio of 3.02. The firm’s 50-day moving average price is $36.96 and its two-hundred day moving average price is $32.61. The stock has a market cap of $17.79 billion, a price-to-earnings ratio of 5.75, a PEG ratio of 0.31 and a beta of 2.17.

Super Micro Computer (NASDAQ:SMCI) last released its quarterly earnings data on Tuesday, November 3rd. The company reported $1.81 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.28 by $0.53. Super Micro Computer had a net margin of 6.77% and a return on equity of 38.97%. The firm had revenue of $19.95 billion during the quarter, compared to analysts’ expectations of $16.29 billion. During the same period last year, the business earned $0.35 earnings per share. Super Micro Computer’s revenue was up 297.5% compared to the same quarter last year. On average, analysts expect that Super Micro Computer, Inc. will post 5.90 EPS for the current fiscal year.

Insiders Place Their Bets

In other news, CEO Charles Liang sold 100,000 shares of the stock in a transaction on Wednesday, October 7th. The stock was sold at an average price of $45.02, for a total transaction of $4,502,000.00. Following the completion of the transaction, the chief executive officer directly owned 337,506 shares in the company, valued at approximately $15,194,520.12. This represents a 22.86% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Chiu-Chu Liang sold 100,000 shares of the firm’s stock in a transaction dated Wednesday, October 7th. The stock was sold at an average price of $45.02, for a total value of $4,502,000.00. Following the sale, the director directly owned 337,506 shares of the company’s stock, valued at $15,194,520.12. The trade was a 22.86% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 400,000 shares of company stock valued at $16,442,000 over the last quarter. 16.10% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of large investors have recently bought and sold shares of SMCI. AlphaGrep UK Ltd purchased a new position in Super Micro Computer during the third quarter worth about $204,000. Meeder Advisory Services Inc. purchased a new stake in shares of Super Micro Computer in the 3rd quarter valued at approximately $252,000. Resona Asset Management Co. Ltd. raised its stake in shares of Super Micro Computer by 4.4% in the 3rd quarter. Resona Asset Management Co. Ltd. now owns 152,234 shares of the company’s stock valued at $6,251,000 after acquiring an additional 6,347 shares during the period. Advisors Asset Management Inc. acquired a new position in shares of Super Micro Computer in the 3rd quarter worth approximately $412,000. Finally, Edmond DE Rothschild Holding S.A. acquired a new position in shares of Super Micro Computer in the 3rd quarter worth approximately $25,000. Institutional investors and hedge funds own 84.06% of the company’s stock.

About Super Micro Computer

Super Micro Computer, Inc. designs and sells server and storage systems, networking equipment, and related software and services. Its offerings include systems for data centers, cloud computing, enterprise applications, high-performance computing, artificial intelligence, and edge computing. The company emphasizes application-optimized solutions, including integrated rack-scale systems that combine computing, storage, networking, and management tools. It also provides system configuration, deployment, and support services.