Early Monday morning, Super Micro (SMCI) issued a warning that the company is going to fall short of its fiscal third-quarter revenue forecast. As a result, the company dropped as much as 12% in pre-market trading and now sits 6% lower than it opened at.
While Super Micro originally issued a March-quarter revenue guidance with a midpoint of $1.47 billion, the landscape has shifted dramatically. Now, the expectation from the company is to report revenue of just $1.28 billion.
This is more of an issue with supply than demand, though. The company is backlogged on crucial components for its latest product lines. While most of these issues have since been resolved, it’s too little too late for this current quarter.
According to Charles Liang, chief executive of the company, the backlog was a result of several huge design wins which impacted the supply chain. But, he says that the company is now positioned to fulfill any delayed deliveries with ease – and that production on backorders has commenced.
While SMCI stock started 2023 strong with a 37% gain in the past 3 months, it has slowly been sliding back down in the past week leading up to this news.
Nevertheless, we’ve put the stock under a microscope and see 3 reasons investors shouldn’t be worried about this earnings miss. Keep reading to discover what we found through the VectorVest stock analyzing software.
Despite This Revenue Miss, SMCI Still Has Excellent Upside Potential and Safety, With Very Good Timing
The VectorVest system transforms your approach to investing, helping you find winning opportunities on autopilot.
You’re given all the insights you need in 3 simple ratings: relative value (RV), relative safety (RS), and relative timing (RT). Each of these ratings sits on a scale of 0.00-2.00, with 1.00 being the average. Ratings above the average indicate overperformance and vice versa.
And to make your approach to stock analysis even quicker and easier, VectorVest even offers a clear buy, sell, or hold recommendation based on these ratings. As for SMCI, here’s what you need to know…
- Excellent Upside Potential: The RV rating is a comparison of a stock’s long-term price appreciation potential (3 years out) compared to corporate bond rates and risk. And right now, SMCI has an excellent RV rating of 1.80. Moreover, the stock is undervalued right now - with a current value as high as $159.
- Excellent Safety: In terms of risk, SMCI has excellent safety - with an RS rating of 1.40. This is calculated by analyzing the company’s financial consistency & predictability, debt-to-equity ratio, and business longevity.
- Very Good Timing: To top it all off, SMCI has very good timing despite the past week of negative movement. The RT rating of 1.39 is calculated based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 1.52 is excellent - but is it enough to earn the stock a buy rating after the recent news of Super Micro Computer’s earnings miss? Don’t play the guessing game or let emotion influence your decision-making. Get a clear answer on your next move with a free stock analysis at VectorVest today
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for SMCI, it has excellent upside potential and safety - with very good timing to boot. Despite the underperformance in terms of revenue this quarter, there is still a lot to love about this stock.
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