Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Super Micro Computer SMCI in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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 | 22.76 | 4.90 | 1.84 | 6.68% | $0.36 | $0.6 | 37.87% |
| Apple Inc | 34.73 | 52.01 | 9.18 | 30.44% | $28.2 | $39.68 | 4.87% |
| NetApp Inc | 23.92 | 26.94 | 4.06 | 23.9% | $0.38 | $1.1 | 7.61% |
| Hewlett Packard Enterprise Co | 13.34 | 1.11 | 0.86 | 2.34% | $1.23 | $2.44 | 10.11% |
| Pure Storage Inc | 117.42 | 11.44 | 5.89 | 2.52% | $0.08 | $0.54 | 10.91% |
| Eastman Kodak Co | 8.88 | 0.42 | 0.42 | 2.09% | $0.05 | $0.06 | -9.49% |
| Immersion Corp | 4.83 | 1.21 | 1.72 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 16.79 | 1.16 | 0.71 | -0.34% | $0.0 | $0.01 | 14.12% |
| Average | 31.42 | 13.47 | 3.26 | 10.62% | $4.28 | $6.27 | 194.56% |
Through an analysis of Super Micro Computer, we can infer the following trends:
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The stock's Price to Earnings ratio of 22.76 is lower than the industry average by 0.72x, suggesting potential value in the eyes of market participants.
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Considering a Price to Book ratio of 4.9, which is well below the industry average by 0.36x, the stock may be undervalued based on its book value compared to its peers.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 1.84, which is 0.56x the industry average.
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The Return on Equity (ROE) of 6.68% is 3.94% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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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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The company has lower gross profit of $600 Million, which indicates 0.1x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company's revenue growth of 37.87% is significantly lower compared to the industry average of 194.56%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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 considering the Debt-to-Equity ratio, Super Micro Computer can be compared to its top 4 peers, leading to the following observations:
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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 in the Technology Hardware, Storage & Peripherals industry, the PE, PB, and PS ratios are all low compared to its peers, indicating potential undervaluation. However, the low ROE, EBITDA, gross profit, and revenue growth suggest weaker financial performance relative to industry competitors. This combination of low valuation multiples and weak financial metrics may warrant further investigation into Super Micro Computer's operational efficiency and growth prospects within the sector.
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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