Market Analysis: Super Micro Computer And Competitors In Technology Hardware, Storage & Peripherals Industry

In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Super Micro Computer SMCI and its primary competitors in the Technology Hardware, Storage & Peripherals industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for 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 53.49 12.43 4.22 11.29% $0.37 $0.56 103.25%
Apple Inc 29.46 39.47 7.72 49.79% $43.22 $54.85 2.07%
Hewlett Packard Enterprise Co 9.91 0.94 0.69 3.07% $1.23 $2.56 -6.61%
NetApp Inc 26.92 23.34 3.09 28.36% $0.39 $1.11 -6.07%
Pure Storage Inc 189.32 11.70 5.19 6.59% $0.11 $0.55 12.84%
Corsair Gaming Inc 116.45 2.03 0.90 -0.47% $0.01 $0.09 16.49%
Eastman Kodak Co 4.88 0.28 0.26 0.0% $0.02 $0.05 -6.92%
AstroNova Inc 39.11 1.51 0.89 3.21% $0.01 $0.01 -4.71%
Transact Technologies Inc 14.88 1.93 0.98 2.35% $0.0 $0.01 -3.73%
Average 53.87 10.15 2.47 11.61% $5.62 $7.4 0.42%

Through a thorough examination of Super Micro Computer, we can discern the following trends:

  • The Price to Earnings ratio of 53.49 is 0.99x lower than the industry average, indicating potential undervaluation for the stock.

  • The elevated Price to Book ratio of 12.43 relative to the industry average by 1.22x suggests company might be overvalued based on its book value.

  • With a relatively high Price to Sales ratio of 4.22, which is 1.71x the industry average, the stock might be considered overvalued based on sales performance.

  • The Return on Equity (ROE) of 11.29% is 0.32% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

  • Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $370 Million, which is 0.07x below the industry average, potentially indicating lower profitability or financial challenges.

  • The company has lower gross profit of $560 Million, which indicates 0.08x below the industry average. This potentially indicates lower revenue after accounting for production costs.

  • The company's revenue growth of 103.25% exceeds the industry average of 0.42%, indicating strong sales performance and market outperformance.

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.

When comparing Super Micro Computer with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

  • Among its top 4 peers, Super Micro Computer has a stronger financial position with a lower debt-to-equity ratio of 0.12.

  • This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.

Key Takeaways

Super Micro Computer has a low PE ratio compared to its peers in the Technology Hardware, Storage & Peripherals industry, indicating that it may be undervalued. The high PB and PS ratios suggest that the company's stock price may be overvalued relative to its book value and sales. The low ROE, EBITDA, and gross profit indicate that Super Micro Computer may have lower profitability compared to its industry peers. However, the high revenue growth suggests that the company is experiencing strong sales growth.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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