While Super Micro Computer’s (NASDAQ: SMCI) has climbed more than 60% year-to-date, with three- and five-year total shareholder returns exceeding 600%, it has been quite volatile this month.
The short-term uncertainty was exacerbated last week, after the server maker lowered its first-quarter revenue forecast for the next year amid shifting sales.
Following the news, the shares dropped nearly 9% on Friday, making the company one of the biggest decliners in the S&P 500.
As of the time of writing, Monday, October 27, the SMCI stock is up 2.73% in pre-market, trading at $49.66 and somewhat mitigating its five-day drop of more than 12%.
Wall Street cautious about SMCI
As mentioned, the second half of October has been quite eventful for Super Micro, and the number of conflicting SMCI stock rating and price revisions it received last week reflects that.
On October 23, Needham reiterated its “Buy” rating with a projected 12-month SMCI price of $60 (+24.25%). On the same day, Citi doubled down on its “Hold” rating with a $48 forecast (-0.60%).
A day later, Mizuho Securities and Barclays stuck with their “Hold” ratings and price targets of $50 (+3.54%) and $45 (-6.81%), respectively.
At the same time, J.P. Morgan dropped its estimates from $45 to $43 (-10,95%), likewise with a “Hold” label, while Northland raised its own figure from $59 to $67 (+38.75%) with a “Buy” rating.
Goldman Sachs likewise weighed, calling the SMCI shares a “Sell” but increasing its SMCI price prediction from $27 to $30 (-37.88%).
SMCI stock price target
Wall Street is thus not too optimistic about Super Micro Computer’s long-term success. SMCI shares enjoyan overall “Hold” rating on the analyst platform TipRanks and the average price target of $44.15 for the next 12 months, which suggests a further -8.57% decline from the current price.
All in all, it appears that Q1 revenue guidance cut from $6–$7 billion down to $5 billion has put a lot of strain on Super Micro, despite CEO Charles Liang’s statement that demand remains strong.
Right now, investors are in anticipation for the company’s new earnings call scheduled for November 4, when the management is set to provide more detail regarding its future outlook.
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