Investigating Super Micro Computer's Standing In Technology Hardware, Storage & Peripherals Industry Compared To Competitors

In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Super Micro Computer SMCI in comparison to its major competitors within the Technology Hardware, Storage & Peripherals industry. By analyzing crucial 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.

Through a meticulous analysis of Super Micro Computer, we can observe the following trends:

• A Price to Earnings ratio of 39.65 significantly below the industry average by 0.75x suggests undervaluation. This can make the stock appealing for those seeking growth.

• The current Price to Book ratio of 8.19, which is 0.67x the industry average, is substantially lower than the industry average, indicating potential undervaluation.

• The Price to Sales ratio of 3.51, which is 1.08x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The Return on Equity (ROE) of 9.85% is 1.39% above the industry average, highlighting efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $400 Million is 0.09x below the industry average, suggesting potential lower profitability or financial challenges.

• With lower gross profit of $600 Million, which indicates 0.09x below the industry average, the company may experience lower revenue after accounting for production costs.

• The company's revenue growth of 200.01% exceeds the industry average of -6.74%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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.

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:

• Among its top 4 peers, Super Micro Computer has a stronger financial position with a lower debt-to-equity ratio of 0.37.

• This indicates that the company relies less on debt financing and maintains a more favorable 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 is undervalued compared to its peers in the Technology Hardware, Storage & Peripherals industry. The high ROE suggests that the company is efficiently utilizing its resources to generate profits. However, the low EBITDA and gross profit figures may raise concerns about the company's operational efficiency. The high revenue growth rate is a positive sign for the company's future prospects within the industry.

This article was generated by Benzinga's automated content engine and reviewed by an editor.