NASDAQ:SMCI, a strong growth stock, setting up for a breakout.

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if SUPER MICRO COMPUTER INC (NASDAQ:SMCI) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted SUPER MICRO COMPUTER INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Looking at the Growth

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.
• 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.
• The Revenue has grown by 109.77% in the past year. This is a very strong growth!
• 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 quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.17% yearly.
• SMCI is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.60% yearly.

Health Examination for NASDAQ:SMCI

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:SMCI, the assigned 6 reflects its health status:

• An Altman-Z score of 6.01 indicates that SMCI is not in any danger for bankruptcy at the moment.
• SMCI has a Altman-Z score of 6.01. This is amongst the best in the industry. SMCI outperforms 83.87% 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.
• The Current ratio of SMCI (4.69) is better than 90.32% 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.
• The Quick ratio of SMCI (2.29) is better than 87.10% of its industry peers.

Analyzing Profitability Metrics

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:SMCI scores a 7 out of 10:

• The Return On Assets of SMCI (11.84%) is better than 87.10% of its industry peers.
• SMCI's Return On Equity of 20.59% is amongst the best of the industry. SMCI outperforms 87.10% of its industry peers.
• SMCI's Return On Invested Capital of 14.50% is fine compared to the rest of the industry. SMCI outperforms 70.97% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for SMCI is above the industry average of 16.39%.
• 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.
• Looking at the Profit Margin, with a value of 8.88%, SMCI belongs to the top of the industry, outperforming 83.87% of the companies in the same industry.
• In the last couple of years the Profit Margin of SMCI has grown nicely.
• SMCI's Operating Margin of 9.72% is fine compared to the rest of the industry. SMCI outperforms 77.42% of its industry peers.
• In the last couple of years the Operating Margin of SMCI has grown nicely.

Why is NASDAQ:SMCI a setup?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NASDAQ:SMCI scores a 8 out of 10:

Although the technical rating is bad, SMCI does present a nice setup opportunity. 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 32.43, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

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

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

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

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.