Critical Analysis: Super Micro Computer (SMCI) and The Competition

Super Micro Computer (NASDAQ:SMCI) is one of 81 public companies in the “Technology Hardware, Storage & Peripherals” industry, but how does it weigh in compared to its rivals? We will compare Super Micro Computer to related companies based on the strength of its profitability, valuation, earnings, analyst recommendations, dividends, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings for Super Micro Computer and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Super Micro Computer	2	11	4	1	2.22
Super Micro Computer Competitors	1051	4283	7558	358	2.55

Super Micro Computer currently has a consensus target price of $42.13, indicating a potential upside of 13.14%. As a group, “Technology Hardware, Storage & Peripherals” companies have a potential upside of 20.17%. Given Super Micro Computer’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Super Micro Computer has less favorable growth aspects than its rivals.

Risk and Volatility

Super Micro Computer has a beta of 1.95, suggesting that its stock price is 95% more volatile than the S&P 500. Comparatively, Super Micro Computer’s rivals have a beta of 1.60, suggesting that their average stock price is 60% more volatile than the S&P 500.

Institutional & Insider Ownership

84.1% of Super Micro Computer shares are held by institutional investors. Comparatively, 51.5% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by institutional investors. 16.1% of Super Micro Computer shares are held by insiders. Comparatively, 10.8% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Super Micro Computer and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Super Micro Computer	5.71%	27.83%	9.11%
Super Micro Computer Competitors	-493.26%	-14.53%	4.44%

Valuation and Earnings

This table compares Super Micro Computer and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Super Micro Computer	$39.06 billion	$2.23 billion	11.64
Super Micro Computer Competitors	$24.36 billion	$3.81 billion	6.31

Super Micro Computer has higher revenue, but lower earnings than its rivals. Super Micro Computer is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Super Micro Computer beats its rivals on 9 of the 13 factors compared.

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. The company provides application-optimized server solutions, rackmount and blade servers, storage, and subsystems and accessories; and server software management solutions, such as Server Management Suite, including Supermicro Server Manager, Supermicro Power Management software, Supermicro Update Manager, SuperCloud Composer, and SuperDoctor 5. In addition, it offers server subsystems and accessories comprising server boards, chassis, power supplies, and other accessories. Further, the company provides server and storage system integration, configuration, and software upgrade and update services; and technical documentation services, as well as identifies service requirements, creates and executes project plans, and conducts verification testing and technical documentation, and training services. Additionally, it offers help desk and on-site product support services for its server and storage systems; and customer support services, including ongoing maintenance and technical support for its products. The company provides its products to enterprise data centers, cloud computing, artificial intelligence, and 5G and edge computing markets. It sells its products through direct and indirect sales force, distributors, value-added resellers, system integrators, and original equipment manufacturers. The company was incorporated in 1993 and is headquartered in San Jose, California.