In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Super Micro Computer SMCI alongside its primary competitors in the Technology Hardware, Storage & Peripherals industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.
Super Micro Computer Background
Super Micro Computer Inc provides high-performance server technology services to cloud computing, data center, Big Data, high-performance computing, and "Internet of Things" embedded markets. Its solutions include server, storage, blade and workstations to full racks, networking devices, and server management software. The firm follows a modular architectural approach, which provides flexibility to deliver customized solutions. The Company operates in one operating segment that develops and provides high-performance server solutions based upon an innovative, modular and open-standard architecture. More than half of the firm's revenue is generated in the United States, with the rest coming from Europe, Asia, and other regions.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Super Micro Computer Inc | 79.50 | 19.33 | 6.27 | 11.29% | $0.37 | $0.56 | 103.25% |
| Apple Inc | 26.39 | 35.36 | 6.91 | 49.79% | $43.22 | $54.85 | 2.07% |
| Hewlett Packard Enterprise Co | 12.54 | 1.10 | 0.85 | 1.82% | $1.23 | $2.46 | -13.5% |
| NetApp Inc | 24.26 | 22.11 | 3.69 | 35.49% | $0.46 | $1.15 | 5.24% |
| Pure Storage Inc | 281.74 | 13.69 | 6.29 | 5.41% | $0.11 | $0.57 | -2.52% |
| Corsair Gaming Inc | 402.67 | 1.87 | 0.88 | 0.94% | $0.03 | $0.1 | 4.65% |
| Eastman Kodak Co | 7.52 | 0.43 | 0.41 | 0.21% | $0.03 | $0.05 | -9.84% |
| AstroNova Inc | 27.93 | 1.45 | 0.89 | 3.06% | $0.0 | $0.01 | 5.45% |
| Transact Technologies Inc | 10.49 | 1.25 | 0.68 | -0.16% | $0.0 | $0.01 | -26.13% |
| Average | 99.19 | 9.66 | 2.57 | 12.07% | $5.63 | $7.4 | -4.32% |
After a detailed analysis of Super Micro Computer, the following trends become apparent:
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The Price to Earnings ratio of 79.5 is 0.8x lower than the industry average, indicating potential undervaluation for the stock.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 19.33 which exceeds the industry average by 2.0x.
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With a relatively high Price to Sales ratio of 6.27, which is 2.44x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 11.29% that is 0.78% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $370 Million is 0.07x below the industry average, suggesting potential lower profitability or financial challenges.
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The gross profit of $560 Million is 0.08x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company's revenue growth of 103.25% is notably higher compared to the industry average of -4.32%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In light of the Debt-to-Equity ratio, a comparison between Super Micro Computer and its top 4 peers reveals the following information:
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Super Micro Computer demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.12, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
The PE, PB, and PS ratios for Super Micro Computer indicate that it is undervalued compared to its peers in the Technology Hardware, Storage & Peripherals industry. However, the low ROE, EBITDA, gross profit, and high revenue growth suggest that the company may be facing operational challenges and intense competition within the industry. It is important for Super Micro Computer to improve its profitability and operational efficiency to enhance its competitive position in the market.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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