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Super Micro Computer (NASDAQ:SMCI) shares tumbled 15% in pre-market trading Wednesday after the server maker issued third-quarter preliminary earnings that fell far short of analyst expectations.
The company now expects adjusted earnings per share of $0.29 to $0.31, below both its earlier guidance of $0.46 to $0.62 and the Street estimate of $0.53. Revenue is projected between $4.5 billion and $4.6 billion, down from prior guidance of $5 billion to $6 billion and under the $5.35 billion consensus.
Super Micro attributed the weak update to delayed platform decisions by some customers, pushing sales into the fourth quarter. Gross margins also dropped 220 basis points from the previous quarter, hit by increased inventory reserves tied to older products and higher costs linked to speeding up delivery of new systems.
The company, led by CEO Charles Liang, had earlier forecast up to $40 billion in fiscal 2026 revenue. But with recent results falling short, analysts are questioning the outlook as customers await newer servers powered by Nvidia's (NASDAQ:NVDA) latest Blackwell chips.
Is SMCI Stock a Buy Now?
Based on the one year price targets offered by 13 analysts, the average target price for Super Micro Computer Inc is $48.62 with a high estimate of $93 and a low estimate of $15. The average target implies a upside of 35% from the current price of $36.
Based on GuruFocus estimates, the estimated GF Value for Super Micro Computer Inc in one year is $59.52, suggesting a upside of +65.33% from the current price of $36.
This article first appeared on GuruFocus.