In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Super Micro Computer SMCI against its key competitors in the Technology Hardware, Storage & Peripherals industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide 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 | 70.11 | 16.29 | 5.53 | 11.29% | $0.37 | $0.56 | 103.25% |
| Apple Inc | 27.79 | 37.23 | 7.28 | 49.79% | $43.22 | $54.85 | 2.07% |
| Hewlett Packard Enterprise Co | 11.68 | 1.03 | 0.79 | 1.82% | $1.23 | $2.46 | -13.5% |
| NetApp Inc | 23.79 | 21.68 | 3.62 | 35.49% | $0.46 | $1.15 | 5.24% |
| Pure Storage Inc | 272.58 | 12.88 | 6.08 | 5.41% | $0.11 | $0.57 | 3.54% |
| Corsair Gaming Inc | 409.33 | 1.90 | 0.89 | 0.94% | $0.03 | $0.1 | 4.65% |
| Eastman Kodak Co | 7.21 | 0.41 | 0.39 | 0.21% | $0.03 | $0.05 | -9.84% |
| AstroNova Inc | 39.11 | 1.51 | 0.89 | 3.21% | $0.01 | $0.01 | -4.71% |
| Transact Technologies Inc | 11.89 | 1.41 | 0.77 | -0.16% | $0.0 | $0.01 | -26.13% |
| Sonim Technologies Inc | 10.92 | 1.22 | 0.26 | 2.35% | $0.0 | $0.01 | 34.49% |
| Average | 90.48 | 8.81 | 2.33 | 11.01% | $5.01 | $6.58 | -0.47% |
By closely studying Super Micro Computer, we can observe the following trends:
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A Price to Earnings ratio of 70.11 significantly below the industry average by 0.77x suggests undervaluation. This can make the stock appealing for those seeking growth.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 16.29 which exceeds the industry average by 1.85x.
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The stock's relatively high Price to Sales ratio of 5.53, surpassing the industry average by 2.37x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a higher Return on Equity (ROE) of 11.29%, which is 0.28% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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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.
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The company has lower gross profit of $560 Million, which indicates 0.09x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company's revenue growth of 103.25% exceeds the industry average of -0.47%, indicating strong sales performance and market outperformance.
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 examining Super Micro Computer in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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Super Micro Computer demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.12, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
The PE, PB, and PS ratios for Super Micro Computer indicate that it may be undervalued compared to its peers in the Technology Hardware, Storage & Peripherals industry. However, the high ROE, low EBITDA, low gross profit, and high revenue growth suggest a mixed performance when compared to industry standards. It is important to consider all these factors together for a comprehensive industry sector analysis of Super Micro Computer.
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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