Analyzing Super Micro Computer In Comparison To Competitors In Technology Hardware, Storage & Peripherals Industry
In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Super Micro Computer (NASDAQ:SMCI) in relation to its major competitors in the Technology Hardware, Storage & Peripherals industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in 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 | 49.57 | 10.23 | 4.39 | 9.85% | $0.4 | $0.6 | 200.01% |
| Apple Inc | 33.30 | 44.25 | 8.76 | 31.88% | $30.74 | $42.27 | -4.31% |
| Hewlett Packard Enterprise Co | 15.36 | 1.26 | 0.98 | 1.46% | $1.11 | $2.38 | 3.31% |
| NetApp Inc | 27.87 | 23.17 | 4.38 | 27.2% | $0.46 | $1.18 | 5.5% |
| Pure Storage Inc | 217.27 | 15.43 | 7.48 | -2.65% | $0.01 | $0.5 | 17.68% |
| Eastman Kodak Co | 7.96 | 0.44 | 0.44 | 2.66% | $0.06 | $0.05 | -10.43% |
| AstroNova Inc | 22.61 | 1.25 | 0.78 | 1.3% | $0.0 | $0.01 | -6.94% |
| Transact Technologies Inc | 63.67 | 0.99 | 0.63 | -2.66% | $-0.0 | $0.01 | -52.01% |
| Average | 55.43 | 12.4 | 3.35 | 8.46% | $4.63 | $6.63 | -6.74% |
By analyzing Super Micro Computer, we can infer the following trends:
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With a Price to Earnings ratio of 49.57, which is 0.89x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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Considering a Price to Book ratio of 10.23, which is well below the industry average by 0.82x, the stock may be undervalued based on its book value compared to its peers.
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With a relatively high Price to Sales ratio of 4.39, which is 1.31x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 9.85% is 1.39% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $400 Million is 0.09x below the industry average, suggesting potential lower profitability or financial challenges.
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The gross profit of $600 Million is 0.09x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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With a revenue growth of 200.01%, which surpasses the industry average of -6.74%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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.
In terms of the Debt-to-Equity ratio, Super Micro Computer stands in comparison with its top 4 peers, leading to the following comparisons:
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In terms of the debt-to-equity ratio, Super Micro Computer has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.37.
Key Takeaways
The PE, PB, and PS ratios for Super Micro Computer indicate that it is undervalued compared to its peers in the Technology Hardware, Storage & Peripherals industry. The high ROE suggests that the company is efficiently utilizing its resources to generate profits. However, the low EBITDA and gross profit may raise concerns about the company's operational efficiency. The high revenue growth rate is a positive sign for the company's future prospects within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.