Don't overlook NASDAQ:SMCI—a stock with solid growth prospects and a reasonable valuation.

Last update: Sep 4, 2024

SUPER MICRO COMPUTER INC (NASDAQ:SMCI) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:SMCI is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Growth Analysis 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 8 out of 10:

The Earnings Per Share has grown by an impressive 85.45% over the past year.
Measured over the past years, SMCI shows a very strong growth in Earnings Per Share. The EPS has been growing by 66.56% on average per year.
Looking at the last year, SMCI shows a very strong growth in Revenue. The Revenue has grown by 109.77%.
The Revenue has been growing by 33.68% on average over the past years. This is a very strong growth!
The Earnings Per Share is expected to grow by 35.81% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 9.60% on average over the next years. This is quite good.

Valuation Assessment of NASDAQ:SMCI

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:SMCI, the assigned 5 reflects its valuation:

When comparing the Price/Earnings ratio of SMCI to the average of the S&P500 Index (30.14), we can say SMCI is valued slightly cheaper.
SMCI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SMCI is cheaper than 62.50% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.56, SMCI is valued a bit cheaper.
62.50% of the companies in the same industry are more expensive than SMCI, based on the Enterprise Value to EBITDA ratio.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SMCI has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as SMCI's earnings are expected to grow with 35.81% in the coming years.

Assessing Health for NASDAQ:SMCI

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:SMCI was assigned a score of 6 for health:

SMCI has an Altman-Z score of 7.10. This indicates that SMCI is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SMCI (7.10) is better than 90.63% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that SMCI is not too dependend on debt financing.
A Current Ratio of 4.69 indicates that SMCI has no problem at all paying 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.
A Quick Ratio of 2.29 indicates that SMCI has no problem at all paying its short term obligations.
SMCI has a Quick ratio of 2.29. This is in the better half of the industry: SMCI outperforms 75.00% of its industry peers.

Profitability Insights: NASDAQ:SMCI

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:SMCI has earned a 8 out of 10:

Looking at the Return On Assets, with a value of 11.84%, SMCI belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
The Return On Equity of SMCI (20.59%) is better than 84.38% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.50%, SMCI belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
SMCI had an Average Return On Invested Capital over the past 3 years of 20.84%. This is above the industry average of 16.69%.
The last Return On Invested Capital (14.50%) for SMCI is well below the 3 year average (20.84%), which needs to be investigated, but indicates that SMCI had better years and this may not be a problem.
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.
Looking at the Operating Margin, with a value of 9.72%, SMCI belongs to the top 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.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.