For several months in 2024, the server company Super Micro Computer (NASDAQ: SMCI) was the absolute star of the stock market as it, between January and March, managed a rise from about $285 to above $1,000.
Supermicro’s performance since has, however, been less than stellar as the company’s shares entered a months-long period of stagnation that has, with the release of the latest earnings report, ended with an extended session crash for SMCI.
Indeed, while the technology firm managed to slightly beat revenue expectations, reporting $5.31 billion instead of $5.30 billion, the large earnings miss – SMCI reported $6.25 and not the forecast $8.07 – and diminishing gross margin ensured the stock would experience a major collapse.
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The gross margin may have been a particularly damaging statistic as, in the latest quarter, SMCI’s profit stood at 11%, meaning it had substantially decreased from just a single trimester before when it was 15% and from the same quarter one year prior when it stood at 17%.
Finally, even the announced 10-for-1 stock split failed to drive investor enthusiasm for the report, and, by the Wednesday premarket, SMCI stock declined 12.46% from its latest closing price of $616.94 to its press time value of $530.87.
Experts react to SMCI’s disappointing quarterly report
While few experts weighed in with their forecasts for SMCI’s future in the wake of the latest earnings, CNBC’s Jim Cramer may have offered a glimpse into what the average reaction may be when he, after the guidance came out, made an X post simply stating ‘SMCI–nope.’
Still, the one price target revision dated August 6 – the day of the report – shows some confidence in Supermicro has been retained despite the abysmal extended trading. Indeed, while the analysts with JPMorgan (NYSE: JPM) reduced their 12-month price target from $1,150 to $950, they reiterated their ‘buy’ rating.
Wall Street experts continue showing cautious optimism for SMCI
Though the post-earnings revisions are yet to be priced in, the overall expectations for SMCI remain cautiously optimistic as the company has a ‘moderate buy’ rating based on the 11 experts represented on the stock analysis platform TipRanks.
At press time, the Street high forecast for Supermicro shares remains exceptionally bullish at $1,500, though it is worth pointing out that the lowest prediction, assigned at the start of August by Susquehanna, would see the server firm drop to $325.
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