In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Super Micro Computer SMCI alongside its primary competitors in the Technology Hardware, Storage & Peripherals industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide 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 | 39.09 | 10.92 | 3.24 | 7.59% | $0.19 | $0.35 | 14.45% |
| Apple Inc | 31.25 | 47.66 | 7.90 | 37.5% | $30.65 | $40.43 | -0.72% |
| Hewlett Packard Enterprise Co | 9.98 | 0.94 | 0.69 | 3.07% | $1.23 | $2.56 | -6.61% |
| NetApp Inc | 27.10 | 23.50 | 3.11 | 28.36% | $0.39 | $1.11 | -6.07% |
| Pure Storage Inc | 182.02 | 11.25 | 4.99 | 6.59% | $0.11 | $0.55 | 12.84% |
| Xerox Holdings Corp | 15.18 | 0.71 | 0.36 | 1.46% | $0.14 | $0.54 | -5.65% |
| Corsair Gaming Inc | 122.82 | 2.14 | 0.95 | -0.47% | $0.01 | $0.09 | 16.49% |
| Eastman Kodak Co | 5.09 | 0.29 | 0.27 | 0.0% | $0.02 | $0.05 | -6.92% |
| AstroNova Inc | 38.73 | 1.49 | 0.88 | 3.21% | $0.01 | $0.01 | -4.71% |
| Transact Technologies Inc | 14.86 | 1.93 | 0.98 | 2.35% | $0.0 | $0.01 | -3.73% |
| Sonim Technologies Inc | 11.99 | 1.34 | 0.29 | 2.35% | $0.0 | $0.01 | 34.49% |
| Average | 45.9 | 9.12 | 2.04 | 8.44% | $3.26 | $4.54 | 2.94% |
By analyzing Super Micro Computer, we can infer the following trends:
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With a Price to Earnings ratio of 39.09, which is 0.85x 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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The elevated Price to Book ratio of 10.92 relative to the industry average by 1.2x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.24, which is 1.59x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The company has a lower Return on Equity (ROE) of 7.59%, which is 0.85% 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 $190 Million, which is 0.06x below the industry average, the company may face lower profitability or financial challenges.
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The company has lower gross profit of $350 Million, which indicates 0.08x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 14.45%, outperforming the industry average of 2.94%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 assessing Super Micro Computer against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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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 0.07.
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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
Super Micro Computer has a low PE ratio compared to its peers in the Technology Hardware, Storage & Peripherals industry, indicating that it may be undervalued. The company also has a high PB ratio, suggesting that investors are willing to pay a premium for its book value. Additionally, the high PS ratio indicates that the market values Super Micro Computer's sales higher than its peers. On the other hand, the company has a low ROE, indicating lower profitability compared to its industry peers. The low EBITDA and gross profit further suggest weaker financial performance. However, Super Micro Computer has a high revenue growth rate, indicating potential for future expansion.
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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