Skip to main content

Market Overview

Does Supermicro's Pre-Announcement Signal More Pain For Software Earnings?


Last week, Super Micro Computer, Inc. (NASDAQ: SMCI) pre-announced some disappointing Q1 revenue numbers. But what does the company’s weak Q1 mean for its stock and for other software companies that will report Q1 earnings this week?

Clearly the market was disappointed with the news of Q1 revenue in the $530-530 million range, the very low end of the previous guidance of $530-580 million. The stock dropped 19.6 percent during Friday’s session, but Stifel analyst Aaron Rakers sees the sell-off as a buying opportunity.

“We believe Supermicro remains favorably positioned for growth in the cloud/hyper-scale data center market, next-gen storage, and high-performance computing,” Rakers explained. Stifel has initiated Super Micro at Buy with a $40 price target.

Related Link: Goldman Says Apple, Seagate And Visa Options Are Underpricing Earnings Alpha

ROTH Capital Partners analyst Brian Alger agrees that investors should be buying the dip.

“We believe our investment thesis for SMCI remains intact and that while we are disappointed in the adjusted guidance, we continue to see tremendous opportunity for SMCI to rebound not only in the June quarter, but in the future quarters as well,” Alger notes.

ROTH also maintains a Buy rating and $40 price target for the stock.

Investors will be watching closely to see if Super Micro’s weak Q1 is a preview of the type of revenue weakness that larger software companies International Business Machines Corp. (NYSE: IBM) and Intel Corporation (NASDAQ: INTC) could be reporting this week.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for SMCI

Jun 2020Northland Capital MarketsInitiates Coverage OnOutperform
Jun 2020Loop CapitalInitiates Coverage OnBuy
Feb 2020SusquehannaReinstatesPositive

View More Analyst Ratings for SMCI
View the Latest Analyst Ratings


Related Articles (SMCI)

View Comments and Join the Discussion!

Posted-In: Analyst Color News Guidance Price Target Initiation Previews Reiteration Analyst Ratings

Need corporate guidance data?
Click here to see licensing options.

Latest Ratings

NIUDaiwa CapitalInitiates Coverage On41.5
QMCONorthland Capital MarketsInitiates Coverage On12.0
IBKRJefferiesInitiates Coverage On89.0
MRETFTD SecuritiesDowngrades18.5
SWKSGoldman SachsDowngrades135.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at