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On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its financial outlook for Super Micro Computer, Inc. (NASDAQ:SMCI), reducing the price target from $50.00 to $34.00 while maintaining a neutral stance on the company’s stock. The adjustment came after Super Micro Computer announced preliminary financial results for the March quarter, which fell short of expectations. According to InvestingPro data, SMCI has shown significant price volatility, with the stock down 58% over the past year despite maintaining strong financial health metrics. InvestingPro analysis suggests the stock is currently undervalued relative to its Fair Value.
The company’s revenue and earnings per share (EPS) for the quarter are anticipated to be approximately $4.55 billion and $0.30, respectively. These figures represent a significant shortfall from both the consensus estimates, which were $5.35 billion in revenue and $0.53 EPS, and the company’s previous guidance of $5.50 billion in revenue and $0.54 EPS. Despite these challenges, InvestingPro data shows SMCI maintains impressive revenue growth of 125% over the last twelve months, with a healthy current ratio of 6.38x, indicating strong liquidity position.
In addition to the lower-than-expected results, Super Micro Computer cited several contributing factors. The company noted disruptions in customer ramp-ups, which are now expected to occur in the June quarter. These delays could affect various customer segments, including Tier 2, Enterprise, and GB200 clients. Gross margins have also declined quarter-over-quarter by 220 basis points to 9.6%, below the consensus of 12.0%. This decrease was attributed to increased inventory reserves and the expedited logistics costs associated with shipping leading-edge products to the market.
As a result of these preliminary findings, Mizuho analysts have revised their forecasts for Super Micro Computer’s future performance. They have reduced the estimated revenue and EPS for the fiscal year 2025 (ending in June) by approximately 7% and 14%, respectively, and for fiscal year 2026 by around 4% and 17%.
Despite these challenges, the firm recognizes Super Micro Computer’s position as a leading supplier in the AI server market. The company has indicated that it is experiencing order strength leading into the June quarter. However, Mizuho analysts have expressed concerns about near-term challenges, including competitive pressures from rivals such as Dell Technologies (NYSE:DELL), which holds an "Outperform" rating with a $140 price target.
Super Micro Computer is scheduled to release detailed financial results and host an earnings call on May 6, where further insights into the company’s performance and outlook may be provided. For investors seeking deeper analysis, InvestingPro offers comprehensive research reports with 14+ additional exclusive ProTips and detailed financial metrics for SMCI, helping you make more informed investment decisions ahead of the earnings release.
In other recent news, Super Micro Computer Inc. reported lower preliminary financial results for the third quarter of fiscal year 2025, with expected net sales ranging between $4.5 billion and $4.6 billion, which is below its prior guidance of $5.0 billion to $6.0 billion. The company’s GAAP diluted net income per common share is anticipated to be between $0.16 and $0.17, down from the previously guided range of $0.36 to $0.53. Barclays (LON:BARC) analyst George Wang has cut the price target for Super Micro from $59 to $34, maintaining an Equalweight rating, citing concerns over the company’s optimistic guidance and uncertainty in AI server builds. Similarly, JPMorgan analyst Samik Chatterjee reduced the stock target from $39 to $36, maintaining a Neutral rating due to specific customer decisions affecting platform timing. Super Micro also announced a significant performance milestone with its latest systems featuring NVIDIA (NASDAQ:NVDA) HGX B200 8-GPU, achieving top performance on select MLPerf Inference v5.0 benchmarks. Additionally, Defiance ETFs launched the Defiance Daily Target (NYSE:TGT) 2X Short SMCI ETF, offering 2X inverse exposure to Super Micro, designed for traders looking to leverage bets against the company’s performance. These developments highlight the various challenges and advancements facing Super Micro Computer Inc.
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