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Super Micro Computer reports earnings after the bell on Tuesday, with the stock nearly 80% below its March high.
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The few analysts covering the stock generally have a cautious view on its prospects, but expect the stock to regain some of the value it has lost in recent months.
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Concerns about the company’s accounting practices have sent the stock plummeting due to a short seller’s report, delayed filings and EY’s recent firing as its auditor.
Supermicrocomputer (SMCI) will report earnings after the bell as it looks like the stock’s recent decline will be reversed and concerns about its accounting practices will be addressed.
Analysts are cautious about the server manufacturer. Three of the four analysts tracked by Visible Alpha gave the stock a “hold” rating, while the other gave a “sell” rating. However, the average price target of $44.88 suggests that analysts expect the stock to recover from recent losses, but not quite to the highs it reached earlier this year.
For the first quarter of fiscal 2025, analysts expect Super Micro to report revenue of around $6.43 billion, more than triple last year’s $2.12 billion. The tech company’s profit is also expected to more than double to $414.67 million from $157 million a year ago, according to Visible Alpha estimates.
Super Micro’s revenue has benefited from the artificial intelligence (AI) boom as demand for its hardware to power AI products has increased, but its shares have lost performance on rising sales in recent months cannot match, because profits lagged behind higher costs. Questions have also been raised about the company’s accounting practices.
After shares plunged in August, short seller Hindenburg Research released 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 postponed.
The company is also reportedly facing Department of Justice (DOJ) investigations into its accounting practices. Last week, the accounting firm EY resigned as Super Micro’s auditor following a number of concerns about the results of its own investigation into Super Micro’s accounting.
Super Micro shares rose to $26.25 on Tuesday afternoon. That’s slightly lower than where they started the year, but almost 80% lower than the high of over $118 it reached in March.
