NASDAQ:SMCI is showing decent growth, but is still valued reasonably.

Last update: Dec 25, 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.

Growth Analysis for NASDAQ:SMCI

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 grown by an impressive 85.45% over the past year.
The Earnings Per Share has been growing by 66.56% on average over the past years. This is a very strong growth
SMCI shows a strong growth in Revenue. In the last year, 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!
SMCI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.24% yearly.
Based on estimates for the next years, SMCI will show a quite strong growth in Revenue. The Revenue will grow by 9.60% on average per year.

Evaluating Valuation: NASDAQ:SMCI

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:SMCI has earned a 6 for valuation:

SMCI's Price/Earnings ratio is a bit cheaper when compared to the industry. SMCI is cheaper than 77.42% of the companies in the same industry.
When comparing the Price/Earnings ratio of SMCI to the average of the S&P500 Index (27.54), we can say SMCI is valued slightly cheaper.
With a Price/Forward Earnings ratio of 11.03, the valuation of SMCI can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SMCI indicates a somewhat cheap valuation: SMCI is cheaper than 74.19% of the companies listed in the same industry.
SMCI is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.99, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, SMCI is valued a bit cheaper than the industry average as 64.52% of the companies are valued more expensively.
SMCI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SMCI has a very decent profitability rating, which may justify a higher PE ratio.
SMCI's earnings are expected to grow with 23.24% in the coming years. This may justify a more expensive valuation.

A Closer Look at Health for NASDAQ:SMCI

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:SMCI has earned a 6 out of 10:

SMCI has an Altman-Z score of 6.18. This indicates that SMCI is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.18, SMCI belongs to the top of the industry, outperforming 87.10% 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 87.10% of its industry peers.
A Quick Ratio of 2.29 indicates that SMCI has no problem at all paying its short term obligations.
The Quick ratio of SMCI (2.29) is better than 83.87% of its industry peers.

Profitability Analysis for NASDAQ:SMCI

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:SMCI has achieved a 7:

SMCI has a better Return On Assets (11.84%) than 87.10% of its industry peers.
SMCI has a Return On Equity of 20.59%. This is amongst the best in the industry. SMCI outperforms 87.10% of its industry peers.
With a decent Return On Invested Capital value of 14.50%, SMCI is doing good in the industry, outperforming 70.97% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for SMCI is above the industry average of 17.32%.
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.
The Profit Margin of SMCI (8.88%) is better than 83.87% of its industry peers.
SMCI's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 9.72%, SMCI is doing good in the industry, outperforming 77.42% of the companies in the same industry.
In the last couple of years the Operating Margin of SMCI has grown nicely.

More Affordable Growth stocks can be found in our Affordable Growth screener.

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

Keep in mind

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.