It's been a great afternoon session for Super Micro Computer investors, who saw their shares rise 5.4% to a price of $55.02 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
an Improvement in Earnings Next Year but Trades Above Its Graham Number:
Super Micro Computer, Inc., together with its subsidiaries, develops and sells server and storage solutions based on modular and open-standard architecture in the United States, Asia, Europe, and internationally. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 30.44 and an average price to book (P/B) ratio of 4.19. In contrast, Super Micro Computer has a trailing 12 month P/E ratio of 32.7 and a P/B ratio of 5.19.
Super Micro Computer has moved 9.2% over the last year compared to 13.8% for the S&P 500 — a difference of -4.7%. Super Micro Computer has a 52 week high of $66.44 and a 52 week low of $17.25.
Negative Cash Flows:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $3,500 | $3,339 | $3,557 | $5,196 | $7,123 | $14,989 |
| Gross Margins | 14% | 16% | 15% | 15% | 18% | 14% |
| Net Margins | 2% | 3% | 3% | 5% | 9% | 8% |
| Net Income (M) | $72 | $84 | $112 | $285 | $640 | $1,153 |
| Net Interest Expense (M) | $7 | $2 | $2 | $6 | $10 | $23 |
| Depreciation & Amort. (M) | $24 | $28 | $28 | $25 | $27 | $30 |
| Diluted Shares (M) | 52 | 54 | 54 | 56 | 58 | 636 |
| Earnings Per Share | $1.38 | $1.57 | $2.09 | $5.08 | $11.02 | $1.81 |
| EPS Growth | n/a | 13.77% | 33.12% | 143.06% | 116.93% | -83.58% |
| Avg. Price | $19.52 | $26.5 | $36.93 | $43.34 | $284.26 | $52.18 |
| P/E Ratio | 13.56 | 16.46 | 16.71 | 7.95 | 23.49 | 28.83 |
| Free Cash Flow (M) | $238 | -$75 | $65 | -$486 | $627 | -$2,610 |
| CAPEX (M) | $25 | $44 | $58 | $45 | $37 | $124 |
| EV / EBITDA | 5.67 | 9.8 | 11.99 | 7.12 | 18.53 | 27.35 |
| Total Debt (M) | $24 | $44 | $203 | $598 | $290 | $2,174 |
| Net Debt / EBITDA | -2.35 | -2.38 | -0.3 | 0.81 | -0.55 | 0.6 |
| Current Ratio | 2.26 | 2.29 | 1.91 | 2.89 | 2.43 | 6.38 |
Super Micro Computer has rapidly growing revenues and increasing reinvestment in the business and an excellent current ratio of 6.38. Additionally, the company's financial statements display positive EPS growth and healthy leverage levels. However, the firm suffers from slimmer gross margins than its peers and negative cash flows.
