Is NASDAQ:SMCI on the Verge of a Major Breakout as a Strong Growth Stock?

Last update: Jul 3, 2024

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether SUPER MICRO COMPUTER INC (NASDAQ:SMCI) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but SUPER MICRO COMPUTER INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

A Closer Look at Growth for NASDAQ:SMCI

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:SMCI boasts a 9 out of 10:

The Earnings Per Share has grown by an impressive 75.48% over the past year.
SMCI shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 67.00% yearly.
Looking at the last year, SMCI shows a very strong growth in Revenue. The Revenue has grown by 79.79%.
SMCI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.21% yearly.
SMCI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 54.97% yearly.
SMCI is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 23.36% yearly.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Health Analysis for NASDAQ:SMCI

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:SMCI has earned a 6 out of 10:

An Altman-Z score of 10.79 indicates that SMCI is not in any danger for bankruptcy at the moment.
SMCI has a Altman-Z score of 10.79. This is amongst the best in the industry. SMCI outperforms 96.88% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that SMCI is not too dependend on debt financing.
SMCI has a Current Ratio of 4.69. This indicates that SMCI is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 4.69, SMCI belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
SMCI has a Quick Ratio of 2.29. This indicates that SMCI is financially healthy and has no problem in meeting its short term obligations.
SMCI's Quick ratio of 2.29 is fine compared to the rest of the industry. SMCI outperforms 78.13% of its industry peers.

Looking at the Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:SMCI, the assigned 7 is a significant indicator of profitability:

The Return On Assets of SMCI (11.84%) is better than 87.50% of its industry peers.
SMCI has a better Return On Equity (20.59%) than 84.38% of its industry peers.
SMCI's Return On Invested Capital of 13.64% is amongst the best of the industry. SMCI outperforms 81.25% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SMCI is above the industry average of 14.45%.
SMCI has a better Profit Margin (8.88%) than 84.38% of its industry peers.
In the last couple of years the Profit Margin of SMCI has grown nicely.
With an excellent Operating Margin value of 9.72%, SMCI belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
In the last couple of years the Operating Margin of SMCI has grown nicely.
In the last couple of years the Gross Margin of SMCI has grown nicely.

How does the Setup look for NASDAQ:SMCI

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for NASDAQ:SMCI is 7:

SMCI has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price. There is a support zone below the current price at 832.84, a Stop Loss order could be placed below this zone.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Our latest full fundamental report of SMCI contains the most current fundamental analsysis.

Check the latest full technical report of SMCI for a complete technical analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.