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 | 88 | 20.45 | 6.94 | 11.29% | $0.37 | $0.56 | 103.25% |
| Apple Inc | 26.30 | 35.25 | 6.89 | 49.79% | $43.22 | $54.85 | 2.07% |
| Hewlett Packard Enterprise Co | 12.94 | 1.14 | 0.88 | 1.82% | $1.23 | $2.46 | -13.5% |
| NetApp Inc | 23.87 | 21.76 | 3.63 | 35.49% | $0.46 | $1.15 | 5.24% |
| Pure Storage Inc | 299.63 | 14.16 | 6.69 | 5.41% | $0.11 | $0.57 | 3.54% |
| Corsair Gaming Inc | 415.67 | 1.93 | 0.91 | 0.94% | $0.03 | $0.1 | 4.65% |
| Eastman Kodak Co | 7.28 | 0.42 | 0.38 | 0.0% | $0.02 | $0.05 | -6.92% |
| AstroNova Inc | 38.77 | 1.49 | 0.88 | 3.21% | $0.01 | $0.01 | -4.71% |
| Transact Technologies Inc | 12.67 | 1.64 | 0.84 | 2.35% | $0.0 | $0.01 | -3.73% |
| Average | 104.64 | 9.72 | 2.64 | 12.38% | $5.63 | $7.4 | -1.67% |
After examining Super Micro Computer, the following trends can be inferred:
-
With a Price to Earnings ratio of 88.0, which is 0.84x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
-
With a Price to Book ratio of 20.45, which is 2.1x the industry average, Super Micro Computer might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
-
With a relatively high Price to Sales ratio of 6.94, which is 2.63x the industry average, the stock might be considered overvalued based on sales performance.
-
The company has a lower Return on Equity (ROE) of 11.29%, which is 1.09% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
-
With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $370 Million, which is 0.07x below the industry average, the company may face lower profitability or financial challenges.
-
Compared to its industry, the company has lower gross profit of $560 Million, which indicates 0.08x below the industry average, potentially indicating lower revenue after accounting for production costs.
-
The company's revenue growth of 103.25% is notably higher compared to the industry average of -1.67%, showcasing exceptional sales performance and strong demand for its products or services.
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.
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:
-
Super Micro Computer exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.12.
-
This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.
Key Takeaways
The PE, PB, and PS ratios for Super Micro Computer indicate that the company is undervalued compared to its peers in the Technology Hardware, Storage & Peripherals industry. However, the low ROE, EBITDA, and gross profit, along with high revenue growth, suggest that Super Micro Computer may be facing challenges in generating profits and operational efficiency. It is important for the company to focus on improving profitability metrics to enhance its competitive position within the industry.
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.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
