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Supermicro shares took a big hit on Wednesday after the company did not say exactly when it would file its 2024 annual report following EY’s resignation as auditor.
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JPMorgan analysts cut their price target by more than 50% following the company’s business update and earnings call.
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Super Micro has been given until November 16 to file the report and return to compliance with Nasdaq rules.
Supermicrocomputer (SMCIShares fell 20% on Wednesday after the company stoked concerns that it could be delisted after failing to fully clarify when it would file its delayed 2024 annual report, a need for the company to submit to the Nasdaq rules to comply with.
Analysts at JPMorgan downgraded the company from “neutral” to “underweight” and lowered their price target from $50 to $23, citing “several risk factors that introduce uncertainty.”
Supermicro previously announced that it received a warning letter from Nasdaq on September 17 that it is not complying with the exchange’s rules, which require the “timely filing” of reports. The company has been given until November 16 to file or submit a plan. During the company’s Tuesday earnings call, CFO David Weigand said the company plans to file for an extension.
But Supermicro did not directly address questions during Tuesday’s earnings call about when the company would file its 2024 report or hire a new auditor. Accounting firm EY resigned as the company’s accountant last week.
“We are actively recruiting a new auditor,” CEO Charles Liang said on the call, a transcript of which was provided by AlphaSense. “We are working urgently to bring our financial report back up to date.”
Supermicro said a special committee formed by its board of directors found no evidence of fraud or misconduct. Still, JPMorgan analysts wrote that the “actions of the prior auditor and the special committee are at odds with each other, adding to the confusion.”
Supermicro’s shares are down about 20% this year, but are also a far cry from 2024 highs above $120 at recent prices around $23.
