Despite market turmoil caused by Trump’s tariffs and the escalating trade war with China, Super Micro Computer stock (NASDAQ:SMCI) has shown resilience, rising by 8% this year. This positive performance suggests that the worst may be over for the stock, especially considering the company narrowly avoided Nasdaq delisting in February. This averted delisting removed a significant overhang that had previously weighed on SMCI’s stock. Additionally, the fact that semiconductor chips are exempt from the Trump administration’s tariffs provides further support for a potential recovery. While the stock remains down over 65% from its 52-week high of over $100, these recent developments indicate a possible turning point.
We believe SMCI stock presents an attractive buying opportunity at its current price of around $33. This conclusion stems from our analysis, which indicates that despite some minor concerns, the stock’s current valuation appears low relative to its strong operating performance and financial condition. Our assessment, detailed below, considered key parameters such as Growth, Profitability, Financial Stability, and Downturn Resilience, all of which demonstrate the company’s robust fundamentals. However, for investors who seek lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 75% since its inception.
How Does Super Micro Computer’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, SMCI stock looks slightly cheap compared to the broader market.
- Super Micro Computer has a price-to-sales (P/S) ratio of 1.0 vs. a figure of 3.2 for the S&P 500
- Additionally, the company’s price-to-operating income (P/EBIT) ratio is 13.1 compared to 24.3 for S&P 500
How Have Super Micro Computer’s Revenues Grown Over Recent Years?
Super Micro Computer’s Revenues have grown considerably over recent years.
- Super Micro Computer has seen its top line grow at an average rate of 74.5% over the last 3 years (vs. increase of 6.3% for S&P 500)
- Its revenues have grown 125.0% from $9.3 Bil to $21 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
- Also, its quarterly revenues grew 54.9% to $5.7 Bil in the most recent quarter from $3.7 Bil a year ago (vs. 5.0% improvement for S&P 500)
How Profitable Is Super Micro Computer?
Super Micro Computer’s profit margins are considerably worse than most companies in the Trefis coverage universe.
- Super Micro Computer’s Operating Income over the last four quarters was $1.5 Bil, which represents a poor Operating Margin of 7.4% (vs. 13.0% for S&P 500)
- SMCI Operating Cash Flow (OCF) over this period was $-2.0 Bil, pointing to a very poor OCF-to-Sales Ratio of -9.6% (vs. 15.7% for S&P 500)
Does Super Micro Computer Look Financially Stable?
Super Micro Computer’s balance sheet looks strong.
- Super Micro Computer’s Debt figure was $1.9 Bil at the end of the most recent quarter, while its market capitalization is $20 Bil (as of 4/7/2025). This implies a strong Debt-to-Equity Ratio of 9.4% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
- Cash (including cash equivalents) makes up $1.4 Bil of the $9.7 Bil in Total Assets for Super Micro Computer. This yields a moderate Cash-to-Assets Ratio of 14.7% (vs. 14.8% for S&P 500)
How Resilient Is SMCI Stock During A Downturn?
SMCI stock has been more resilient than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
- SMCI stock fell 26.1% from a high of $4.71 on 4 January 2022 to $3.48 on 12 April 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 4 May 2022
- Since then, the stock has increased to a high of $118.81 on 13 March 2024 and currently trades at around $33
Covid Pandemic (2020)
- SMCI stock fell 45.8% from a high of $2.95 on 5 February 2020 to $1.60 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 8 June 2020
Global Financial Crisis (2008)
- SMCI stock fell 64.2% from a high of $1.07 on 11 September 2008 to $0.39 on 13 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 9 December 2009
Putting All The Pieces Together: What It Means For SMCI Stock
In summary, Super Micro Computer’s performance across the parameters detailed above are as follows:
- Growth: Extremely Strong
- Profitability: Extremely Weak
- Financial Stability: Strong
- Downturn Resilience: Strong
- Overall: Strong
The combination of the company’s robust performance in the analyzed parameters and its current low valuation leads us to conclude that SMCI stock is an attractive stock to buy.
While SMCI stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
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