Super Micro Computer: Suffering Isn’t Done Yet

Summary:

• Super Micro Computer faced a challenging 2024, with significant stock volatility and ongoing corporate governance issues. But it doesn’t appear to be holding a “discounted valuation” and “huge growth upside” today.
• The recent positivism is somewhat overstated, as one of the latest pieces of news that came as a surprise to some seemed to go unnoticed by most dip buyers.
• SMCI’s potential PIPE financing could dilute shares by 20%, raising capital but negatively impacting existing shareholders.
• If the SMCI stock valuation multiples continue to fall – at least to the level of Hewlett Packard – then SMCI should be trading at $28.2/sh next year.
• I remain skeptical about SMCI’s recovery prospects, assuming that its suffering isn’t done yet. That’s why I leave my “Hold” rating unchanged today.

Intro & Thesis

Over the past 2 years, I’ve authored 9 articles on Super Micro Computer, Inc. (NASDAQ:SMCI)(NEOE:SMCI:CA), and now you’re reading my 10th one. I think I don’t have to explain to most of

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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