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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Super Micro Computer, Inc. (XNAS:SMCI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SMCI
Name:
SUPER MICRO COMPUTER, INC. (XNAS:SMCI)
Sector:
- 145373.00K
Industry:
Computer Hardware
CEO:
Mr. Charles Liang
Total Employees:
4,607
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -67.36% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SUPER MICRO COMPUTER, INC.(SMCI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMPUTER HARDWARE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
64.54
One Month Price Target:
$65.
Six Month Price Target :
$67.33
Likely Price in One Year's Time:
Ticker:
$70.11
Likely Trading Range Today Under (Normal Volatility)
$64.3
Price Upper limit ($) :
$65.06
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$60.07
This week:
$54.54
This month :
$44.54
Other Primary facts
Market Cap:
3.22B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
52.35M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
31.21%
-24.17%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$85.26
$75.52
$43.82
$53.56
Medium risk (<10%) entry points
Buy Call
Sell Call
$72.35
Buy Put:
Sell Put:
$70.27
$56.70
$58.81
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SMCI
Sharpe Ratio:
6.02%
Comparison:
SMCI, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 85.06% higher than the industry
& ratio is 163.97% higher than the market/S&P 500 average
Average Returns/Yield of
SMCI
Daily returns:
0.22%
Weekly returns:
1.09%
Monthly returns:
4.37%
Yearly returns:
26.14%
Comparison of returns:
Average annual returns/yield (last 3 years) is 100.43% above industry average
Classification:
SMCI, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.23
Statistical test of Returns:
SMCI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.48%
Weekly Volatility:
7.78%
Monthly Volatility:
15.57%
Yearly Volatility:
53.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.44%
Volatility in last five trading days has been -30.02% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.93%
Weekly VaR:
-15.50%
Monthly VaR:
-31.00%
How Much Can the price of
SMCI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$48.47
This translates to price declining to:
$9.68
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SMCI is a 118.77% riskier investment compared to the market/S&P 500 & is 87.42% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 9.49% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SMCI
Beta in relation to market/S&P 500--1.28
Expected beta in 1 year's time:
0.61
Expected beta in 3 year's time:
0.863
Unlevered (debt free) Beta:
1.225
Beta in relation to Nasdaq (XNAS):
0.685
Beta in relation to all global stocks::
0.757
Beta Comparison & Analysis
Beta of competitors/peers::
1.28
Beta is 0.36% higher than peers
Average Industry Beta:
1.224
Beta is 4.96% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
11.18%
Sustainable growth rate is -75.11% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.404
Alpha is 176.92% above industry average alpha yield
Alpha is 2574% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SMCI
Equity cost of capital:
0.120
Equity cost of capital is 3.60% above industry mean WACC
Unlevered (without debt) cost of capital:
11.39%
Before-tax cost of debt:
1.36%
After-tax cost of debt:
1.07%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.07%
WACC is 11.25% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$88.44
Revenue growth rate per share of (3Y):
2.98
Annual revenue growth rate is -95.96% below industry average
EPS:
$3.44
Expected Annual growth rate of EPS (3Y):
2.04%
Expected future EPS growth rate is -90.32% lower than the Computer Hardware industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$1.21
EBITDA per share
$4.51
Valuation Analysis Today of
SMCI
P/E Ratio:
12.2
P/E Ratio of Competitors/Peers:
92.22
P/E ratio is -86.77% lower than main peers & is -9.01% lower than the industry
Stock price/value with industry average P/E ratio: $46.12
SMCI is 39.95% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.73
Price to sales ratio is -74.14% below the industry mean
P/B (Price to book value ratio):
2.98
-
-
Net income growth rate (3Y):
133.73%
Net income growth rate is 45.02% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
5.61%
Net debt to equity ratio:
2.96%
Debt to assets ratio:
2.62%
Net debt to assets ratio:
1.38%
Debt-to-asset ratio is -95.74% below industry average
Ability to repay debt:
Interest coverage ratio:
57.26
Interest coverage ratio is 1060.95% more than industry average
Looking forward:
Debt growth rate:
304.92%
Annual debt growth is 1047% higher than industry average debt growth rate
Debt repayment rate in last quarter: 58.49%
Analysis of Key Statistics
Correlation of price movement with the market:
0.384
Statistical significance of correlation:
SMCI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.599
Stock price is -35.85% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.599
Correlation of price movement with Nasdaq (^IXIC):
0.005
Covariance of price movement with the market:
0.009
Kurtosis
18.639
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.29
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
SMCI
Gross Profit Margin Ratio:
57%
Operating Profit Margin Ratio:
4.52%
Operating profit margin is -40.24% lower than the industry
Net Profit Margin Ratio:
57%
Effective Tax Rate:
12.29%
Effective tax rate is -23.82% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.20%
Return on equity (ROE) is 21.13% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.56%
Return on assets (ROA) is 1.35% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
1.85
Current ratio is -19.95% below industry average
Cash Conversion Cycle (days):
7.9
Cash conversion cycle is -90.09% below industry average
The remaining useful life of property plant & equipment is: 14.5 years
Stock based compensation to net income ratio:
3.82%
In-depth Efficiency Analysis
Revenue generated per employee:
1.0M
Each employee generates 40% more revenue than industry average revenue per employee
EBITDA generated per employee:
51.2K
Each employee generates -50% less EBITDA than industry average revenue per employee
Profit generated per employee:
39.8K
Each employee generates -43% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 31.6K
Each employee generates -356% less free cash flow than industry average revenue per employee
Assets/Capital per employee
84.6K
Each employee generates -356% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 1.31%
Growth rate in R&D investment/expenditure is -177.13% lower than the industry
Competitors/Peer firms of
SMCI
Payoneer Global Inc. (XNAS:PAYO)
ECHOSTAR CORPORATION (XNAS:SATS)
Arqit Quantum Inc (XNAS:ARQQ)
COMMSCOPE HOLDING COMPANY, INC. (XNAS:COMM)
AXCELIS TECHNOLOGIES, INC. (XNAS:ACLS)
Himax Technologies, Inc. (XNAS:HIMX)
CHICKEN SOUP FOR THE SOUL ENTERTAINMENT INC. (XNAS:CSSEN)
NETSCOUT SYSTEMS, INC. (XNAS:NTCT)
EVERBRIDGE, INC. (XNAS:EVBG)
Current Analyst Ratings
Strong buy�0%
Buy�8%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.63B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.97B
658.17M
260.41M
99.96M
188.72M
88.77M
-
449.13M
-
4.12M
22.80M
235.93M
209.04M
183.50M
207.55M
25.51M
183.50M
Statement of Cash Flow
Date:
Period:
7.55M
Differed Income Tax :
19.00K
Stock Based Compensation :
7.02M
Change in Working Capital :
- 177606.00K
Accounts Receivables:
5.86M
Other Working Capital:
13.12M
Other Non-Cash Items:
3.02M
Net Cash Provided by Operating Activities:
- 134571.00K
Investments in PP&E:
- 10802.00K
Net Acquisitions:
-
Purchases of Investments:
- 1100.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
9/30/21
2022
Q1
270.05M
-
270.05M
545.35M
1.18B
36.99M
2.04B
308.30M
-
-
6.72M
63.27M
11.45M
389.74M
-
2.43B
564.63M
240.07M
14.27M
183.66M
113.12M
1.10B
63.50M
27.17M
192.42M
-
1.29B
448.98M
683.20M
449.0K
-
September 30, 2021 at 6:00:00 AM
4.42B
1.13B
2.43B
-
303.57M
33.5M
-
-
- 11902.00K
- 89493.00K
-
-
-
273.76M
184.26M
- 11.00K
37.78M
271.23M
233.45M
- 134571.00K
- 10802.00K
- 145373.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SMCI
2023
2024
2025
2026
2027
$70.46
$147.15
$159.85
$173.65
$188.65