Everyone likes a comeback story. And after roughly doubling from recent lows, Super Micro Computer (NASDAQ: SMCI) seems to be shrugging off delisting fears intensified by the surprise resignation of its auditor on Oct. 30.

But the company isn't out of the woods yet. Let's go over the pros and cons of Supermicro to decide if its shares are a good investment.

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Why did Supermicro crash?

Supermicro shares began declining sharply after hitting an all-time high of around $116 in March. The decline intensified in late August, when short-selling organization Hindenburg Research released a report accusing the company of accounting manipulation, conflicts of interest, and sanctions evasion related to the Russian invasion of Ukraine.

Shortly afterward, Supermicro delayed filing its annual report. And later its auditor, Ernst & Young, resigned, citing an unwillingness to be associated with its financial statements. Some analysts expected Supermicro to be delisted from the Nasdaq, an outcome that could hurt its stock price by scaring away institutional buyers and making its shares less liquid.

Can the company avoid delisting?

Supermicro has been acting quickly to turn the situation around -- creating an independent special committee that released preliminary financial information and conducted an internal review that found "no evidence of fraud or misconduct on the part of management or the Board of Directors."

The market finally started to show optimism when the company named a new auditor -- BDO USA, P.C. -- and submitted a plan to Nasdaq to stay listed. But while the situation looks encouraging, this isn't a guarantee that Supermicro will remain trading on the Nasdaq. According to analysts at Mizuho cited by CNBC, Nasdaq will have to approve or deny the compliance plan, which could take two to five weeks.

In the meantime, investors should examine Supermicro's financial results, which were prepared by the independent special committee. Although these unaudited figures should be taken with a grain of salt, they give important clues about the company's operational health and valuation.

Operational results look excellent

Although Supermicro's preliminary fiscal first-quarter earnings (for the three months ended Sept. 30) fell short of expectations, the results would be considered fantastic for most companies. When numbers are finalized, net sales are expected in a range of $5.9 billion to $6 billion. The bottom end of that range is slightly outside of the bottom of management's guidance of $6 billion to $7 billion, but it is more than double sales in the prior-year period.

Investors should expect Supermicro to maintain a high growth rate because of its exposure to the generative artificial intelligence (AI) industry, which turns chips made by partners like Nvidia and Advanced Micro Devices into ready-to-use computer servers for clients.

Investors don't necessarily have to take Supermicro's financial reports at face value to get an idea of how fast this opportunity is expanding because they can look at the performance of its partners for context. Nvidia's revenue jumped 94% year over year in its most recent quarter. And Supermicro likely played a middle-man role in many of those sales, helping it maintain a similar top-line growth rate. This gives me confidence in the company.

Is Supermicro stock a buy?

With a forward price-to-earnings (P/E) multiple of only around 10 as I write this, Supermicro stock is unbelievably cheap compared to its triple-digit growth rate. And while management is yet to release an official audited report, we can look at its partners' performance to get an idea of what is going on.

That said, Supermicro is not out of the woods yet. Its new auditors need to do their work and it needs to file reports with the SEC to meet Nasdaq listing rules. The company also reportedly faces a Department of Justice probe into its accounting practices.

Investors should keep all these factors in mind when considering a position in Supermicro stock. Some of its numbers are enticing, but there's risk of the unknown.

Should you invest $1,000 in Super Micro Computer right now?

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Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.

Is Super Micro Computer Stock a Buy? was originally published by The Motley Fool