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 | 19.23 | 4.14 | 1.56 | 6.68% | $0.36 | $0.6 | 37.87% |
| Apple Inc | 33.62 | 50.34 | 8.89 | 30.44% | $28.2 | $39.68 | 4.87% |
| NetApp Inc | 22.35 | 25.17 | 3.80 | 23.9% | $0.38 | $1.1 | 7.61% |
| Hewlett Packard Enterprise Co | 12.43 | 1.03 | 0.80 | 2.34% | $1.23 | $2.44 | 10.11% |
| Pure Storage Inc | 105.87 | 10.23 | 5.31 | 2.52% | $0.06 | $0.54 | 10.14% |
| Eastman Kodak Co | 8.71 | 0.41 | 0.41 | 2.09% | $0.05 | $0.06 | -9.49% |
| Immersion Corp | 4.84 | 1.21 | 1.72 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 22.09 | 1.22 | 0.77 | 1.3% | $0.0 | $0.01 | -6.94% |
| Average | 29.99 | 12.8 | 3.1 | 10.86% | $4.28 | $6.27 | 191.44% |
By closely studying Super Micro Computer, we can observe the following trends:
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With a Price to Earnings ratio of 19.23, which is 0.64x 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 4.14, significantly falling below the industry average by 0.32x, it suggests undervaluation and the possibility of untapped growth prospects.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 1.56, which is 0.5x the industry average.
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The company has a lower Return on Equity (ROE) of 6.68%, which is 4.18% 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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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $360 Million, which is 0.08x below the industry average. This potentially indicates lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $600 Million, which indicates 0.1x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company's revenue growth of 37.87% is significantly below the industry average of 191.44%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its 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.
When comparing Super Micro Computer with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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Super Micro Computer is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.4.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
Key Takeaways
For Super Micro Computer, the PE, PB, and PS ratios are all low compared to industry peers, indicating potential undervaluation. However, the low ROE, EBITDA, gross profit, and revenue growth suggest weaker financial performance relative to competitors in the Technology Hardware, Storage & Peripherals sector. This may warrant further investigation into the company's operational efficiency and growth prospects.
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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