Investors should take note of NASDAQ:SMCI, a growth stock that remains attractively priced.

Last update: Oct 18, 2024

Discover SUPER MICRO COMPUTER INC (NASDAQ:SMCI), an undervalued growth gem identified by our stock screener. NASDAQ:SMCI is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Deciphering NASDAQ:SMCI's Growth Rating

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:SMCI has received a 8 out of 10:

The Earnings Per Share has been growing by 43.24% on average over the past years. This is a very strong growth
The Revenue has grown by 109.77% in the past year. This is a very strong growth!
SMCI shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 33.68% yearly.
The Earnings Per Share is expected to grow by 70.61% on average over the next years. This is a very strong growth
SMCI is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.60% yearly.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

How We Gauge Valuation for NASDAQ:SMCI

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:SMCI has received a 8 out of 10:

The Price/Earnings ratio is 4.62, which indicates a rather cheap valuation of SMCI.
Compared to the rest of the industry, the Price/Earnings ratio of SMCI indicates a rather cheap valuation: SMCI is cheaper than 100.00% of the companies listed in the same industry.
SMCI's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 31.77.
With a Price/Forward Earnings ratio of 1.34, the valuation of SMCI can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SMCI indicates a rather cheap valuation: SMCI is cheaper than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.70, SMCI is valued rather cheaply.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SMCI indicates a somewhat cheap valuation: SMCI is cheaper than 62.50% of the companies listed in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of SMCI may justify a higher PE ratio.
A more expensive valuation may be justified as SMCI's earnings are expected to grow with 70.61% in the coming years.

Health Examination 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:

An Altman-Z score of 7.42 indicates that SMCI is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.42, SMCI belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
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.
SMCI has a Current ratio of 4.69. This is amongst the best in the industry. SMCI outperforms 84.38% of its industry peers.
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 has a Quick ratio of 2.29. This is in the better half of the industry: SMCI outperforms 75.00% of its industry peers.

A Closer Look at Profitability for NASDAQ:SMCI

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:

SMCI has a better Return On Assets (11.84%) than 84.38% of its industry peers.
SMCI has a better Return On Equity (20.59%) than 84.38% of its industry peers.
SMCI has a better Return On Invested Capital (14.50%) than 78.13% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SMCI is above the industry average of 16.99%.
The 3 year average ROIC (20.84%) for SMCI is well above the current ROIC(14.50%). The reason for the recent decline needs to be investigated.
With an excellent Profit Margin value of 8.88%, SMCI belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
SMCI's Profit Margin has improved in the last couple of years.
SMCI has a better Operating Margin (9.72%) than 81.25% of its industry peers.
SMCI's Operating Margin has improved in the last couple of years.

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

For an up to date full fundamental analysis you can check the fundamental report of SMCI

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.