Super Micro Computer Receives Upgrades from Analysts Amid Earnings Report
Super Micro Computer (NASDAQ: SMCI) has recently seen a shift in its market outlook, with analysts upgrading the stock from a sell rating to a hold rating. This adjustment was reported by Wall Street Zen in a research report released on August 5, 2023. The company has been under scrutiny from various financial institutions, leading to a mix of ratings and target price adjustments.
In a notable development, Barclays raised its target price for Super Micro Computer from $29.00 to $45.00, while designating an “equal weight” rating on August 7. Additionally, Sanford C. Bernstein upgraded its rating to “hold” on September 16, reflecting a growing consensus on the company’s potential for stability.
Raymond James Financial began coverage of Super Micro Computer, assigning it an “outperform” rating in a report dated June 25. Meanwhile, Needham & Company LLC offered a more optimistic forecast, boosting their target price on the stock from $39.00 to $60.00 with a “buy” rating noted in a report on August 6. Citigroup also raised its target price from $37.00 to $52.00, maintaining a “neutral” rating as of July 11.
Analyst Ratings and Price Targets
Currently, one equities research analyst has assigned Super Micro Computer a Strong Buy rating, six have rated it as Buy, while ten analysts recommend holding the stock. There are two Sell ratings noted. According to MarketBeat.com, the overall consensus rating for the stock stands at “Hold,” with an average price target of $45.36.
In its latest quarterly earnings report released on August 5, Super Micro Computer reported earnings of $0.41 per share, falling short of analysts’ expectations of $0.44 by $0.03. The company recorded a return on equity of 17.14% and a net margin of 4.77%. Revenue for the quarter was $5.76 billion, which was below the anticipated $5.88 billion. This represents an 8.5% increase compared to the same quarter last year.
Looking ahead, Super Micro Computer has set its guidance for the first quarter of fiscal year 2026 at an earnings per share range of $0.400 to $0.520. Analysts project the company will achieve $1.86 earnings per share for the current fiscal year.
Insider Transactions and Institutional Holdings
In recent insider trading activity, Senior Vice President George Kao sold 40,000 shares on August 22 at an average price of $43.88, totaling approximately $1.76 million. Following this transaction, Kao retains 21,820 shares valued at about $957,461.60, marking a significant 64.70% decrease in ownership. CEO Charles Liang also sold 200,000 shares on July 28 for $12 million. Despite this sale, Liang continues to own roughly $2.43 billion in shares.
In the last quarter, insiders sold a total of 490,000 shares, amounting to $27.89 million in transactions. Currently, insiders hold 16.30% of Super Micro Computer’s stock.
Several institutional investors have recently adjusted their holdings in Super Micro Computer. The Vanguard Group Inc. increased its stake by 2.7% in the second quarter, acquiring an additional 1.75 million shares, bringing their total to 66,152,948 shares valued at approximately $3.24 billion.
Geode Capital Management LLC also raised its holdings by 2.7%, owning 13,752,581 shares valued at $671.32 million after purchasing 364,411 additional shares. Disciplined Growth Investors Inc. increased their stake significantly by 16.5%, holding now 9,730,773 shares worth $476.91 million.
Invesco Ltd. and Charles Schwab Investment Management Inc. made similar moves, with Invesco increasing their holdings by 31.6%, and Charles Schwab raising theirs by 5.3% during the same period. Presently, institutional investors collectively own 84.06% of Super Micro Computer’s stock.
Super Micro Computer, Inc. specializes in developing and manufacturing high-performance server and storage solutions. The company operates globally, providing a comprehensive range of products that include modular servers, storage systems, and server management software, among others.
