In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Super Micro Computer SMCI in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for 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 | 41.08 | 8.48 | 3.64 | 9.85% | $0.39 | $0.6 | 5.05% |
| Apple Inc | 26.33 | 35.28 | 6.90 | 49.79% | $43.22 | $54.85 | 2.07% |
| Hewlett Packard Enterprise Co | 11.34 | 1 | 0.77 | 1.82% | $1.23 | $2.46 | -13.5% |
| NetApp Inc | 23 | 20.96 | 3.50 | 35.49% | $0.46 | $1.15 | 5.24% |
| Pure Storage Inc | 263.84 | 12.82 | 5.89 | 5.41% | $0.11 | $0.57 | -2.52% |
| Corsair Gaming Inc | 375 | 1.75 | 0.82 | 0.94% | $0.03 | $0.1 | 4.65% |
| Eastman Kodak Co | 6.61 | 0.38 | 0.36 | 0.21% | $0.03 | $0.05 | -9.84% |
| AstroNova Inc | 27.98 | 1.51 | 0.89 | 3.06% | $0.01 | $0.01 | -0.65% |
| Transact Technologies Inc | 10.96 | 1.31 | 0.71 | -0.16% | $0.0 | $0.01 | -26.13% |
| Average | 93.13 | 9.38 | 2.48 | 12.07% | $5.64 | $7.4 | -5.08% |
By closely studying Super Micro Computer, we can observe the following trends:
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With a Price to Earnings ratio of 41.08, which is 0.44x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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With a Price to Book ratio of 8.48, significantly falling below the industry average by 0.9x, it suggests undervaluation and the possibility of untapped growth prospects.
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The stock's relatively high Price to Sales ratio of 3.64, surpassing the industry average by 1.47x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a lower Return on Equity (ROE) of 9.85%, which is 2.22% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $390 Million, which is 0.07x below the industry average, the company may face lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $600 Million, which indicates 0.08x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company's revenue growth of 5.05% is notably higher compared to the industry average of -5.08%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.
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.
By analyzing Super Micro Computer in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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In terms of the debt-to-equity ratio, Super Micro Computer has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.37.
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, and gross profit suggest that the company may be facing operational challenges. On a positive note, the high revenue growth rate shows potential for future performance improvement.
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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