Microvast Holdings announces departure of chief financial officer
On Thursday, Barclays (LON:BARC) analysts issued a new rating for Super Micro Computer (NASDAQ:SMCI), setting the stock at an Equalweight with a price target of $59.00. The $27 billion market cap company, which has shown remarkable revenue growth of 125% over the last twelve months according to InvestingPro data, received reinstated coverage acknowledging its strong position in the AI server market and advancements in direct liquid cooling technology. The analysts anticipate that the company will be among the early shippers of B200 HGX servers in the upcoming March quarter.
Despite these positive developments, Barclays expressed concerns regarding the company’s narrowing competitive advantage and past issues that may affect investor confidence in the stock’s valuation. The analysts noted that Super Micro Computer’s compliance with filing requirements could bolster business fundamentals by attracting orders from customers who were previously reluctant due to the company’s checkered history. InvestingPro data reveals the company maintains strong financial health with a 3.15 overall score, though its gross profit margin stands at a modest 12.44%.
However, Barclays also pointed out potential future risks related to financial controls and the possibility of capital raises to support working capital needs, particularly for Blackwell purchases. The $59 price target reflects a 13x multiple on the forecasted $4.52 CY26E EPS, which aligns with the target multiple for peer company Dell (NYSE:DELL).
The analysts concluded that the risk/reward profile for Super Micro Computer’s stock is balanced. They also mentioned that the market shows limited enthusiasm for a significant multiple expansion, especially given the lower-margin nature of the AI server business. This cautious stance suggests that while the company has made strides in compliance and product offerings, broader market factors and historical concerns are tempering expectations for its stock performance.
In other recent news, Super Micro Computer announced preliminary financial results for the second quarter of fiscal year 2025, with earnings per share (EPS) ranging from $0.58 to $0.60, falling short of both Goldman Sachs and consensus estimates. The company also provided guidance for the third quarter that was below expectations, forecasting revenue between $5.0 billion and $6.0 billion. Despite these short-term challenges, Super Micro Computer has set an ambitious revenue target of $40 billion for fiscal year 2026, well above the consensus estimate of $29 billion. To support this goal, the company issued $700 million in convertible senior notes due 2028, aimed at funding growth and business expansion.
Loop Capital Markets raised its price target for Super Micro Computer shares to $70, maintaining a Buy rating, citing growth potential from new product lines and engagements with Tier 2 Cloud Service Providers. Goldman Sachs also adjusted its price target to $36, maintaining a Neutral rating, following the company’s earnings announcement. Super Micro Computer is working to file its delayed financial statements by February 25, 2025, addressing governance concerns that have arisen. The company’s strategic initiatives include the NVIDIA (NASDAQ:NVDA) Blackwell ramp, which is expected to drive future growth. Investors appear focused on these long-term prospects, despite recent earnings misses and governance issues.
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