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 | 30.52 | 6.57 | 2.47 | 6.68% | $0.36 | $0.6 | 37.87% |
| Apple Inc | 34.53 | 51.70 | 9.13 | 30.44% | $28.2 | $39.68 | 4.87% |
| NetApp Inc | 28.75 | 23.88 | 4.52 | 27.2% | $0.46 | $1.18 | 5.5% |
| Hewlett Packard Enterprise Co | 14.02 | 1.15 | 0.89 | 1.46% | $1.11 | $2.38 | 3.31% |
| Pure Storage Inc | 205.20 | 14.57 | 7.06 | -2.65% | $0.01 | $0.5 | 17.68% |
| Eastman Kodak Co | 9.16 | 0.43 | 0.44 | 2.09% | $0.05 | $0.06 | -9.49% |
| Immersion Corp | 5.30 | 1.33 | 1.89 | 13.41% | $0.03 | $0.06 | 1323.8% |
| AstroNova Inc | 21.93 | 1.21 | 0.76 | 1.3% | $0.0 | $0.01 | -6.94% |
| Average | 45.56 | 13.47 | 3.53 | 10.46% | $4.27 | $6.27 | 191.25% |
Upon a comprehensive analysis of Super Micro Computer, the following trends can be discerned:
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With a Price to Earnings ratio of 30.52, which is 0.67x 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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Considering a Price to Book ratio of 6.57, which is well below the industry average by 0.49x, the stock may be undervalued based on its book value compared to its peers.
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With a relatively low Price to Sales ratio of 2.47, which is 0.7x the industry average, the stock might be considered undervalued based on sales performance.
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With a Return on Equity (ROE) of 6.68% that is 3.78% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $360 Million, which is 0.08x below the industry average, the company may face lower profitability or financial challenges.
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The gross profit of $600 Million is 0.1x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company is witnessing a substantial decline in revenue growth, with a rate of 37.87% compared to the industry average of 191.25%, which indicates a challenging sales environment.
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.
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:
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Compared to its top 4 peers, Super Micro Computer has a stronger financial position indicated by its lower debt-to-equity ratio of 0.4.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
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 the company's operational efficiency and growth prospects.
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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