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Key Takeaways
- Super Micro Computer reports earnings after the bell Tuesday, with its stock nearly 80% below its highest point in March.
- The few analysts covering the stock mostly have a cautious view of its outlook, but expect it will regain some of the value it has lost in recent months.
- Concerns with the company’s accounting practices have sent the stock lower amid a report from a short seller, delayed filings, and the recent resignation of EY as its auditor.
Super Micro Computer (SMCI) is set to report earnings after the bell as it looks to turn around the stock’s recent slide and address concerns about its accounting practices.
Analysts have a cautious view of the server manufacturer. Three of the four analysts tracked by Visible Alpha gave the stock a “hold” rating, and the other analyst issued a “sell” rating. However, the average price target of $44.88 suggests that analysts expect the stock will recover from its recent losses, but not quite to the heights it reached earlier this year.
For the first quarter of fiscal 2025, analysts expect Super Micro will report revenue around $6.43 billion, more than triple last year’s $2.12 billion. The tech company’s profits are also expected to more than double to $414.67 million, compared to $157 million a year ago, according to estimates compiled by Visible Alpha.
Results Follow Delayed Annual Report, Auditor Resignation
Super Micro’s sales have benefitted from the artificial intelligence (AI) boom as demand for its hardware to power AI products has swelled, but its stock hasn’t matched the performance of its surging sales in recent months as earnings have fallen short on higher costs. Also, questions have been raised about the company’s accounting practices.
After its stock had already tumbled in August, short seller Hindenburg Research issued a report accusing Super Micro of accounting manipulation and other issues. A day later, the company informed the Securities and Exchange Commission (SEC) that the filing of its annual 10-K would be delayed.
The company is also reportedly facing investigations from the Department of Justice (DOJ) into its accounting practices. Last week, the accounting firm EY resigned as Super Micro’s auditor, citing a number of concerns with the results of its own investigation into Super Micro’s accounting.
Super Micro shares were up Tuesday afternoon to $26.25. That’s narrowly below where they started the year, but nearly 80% lower than the heights of over $118 it reached in March.