Super Micro Computer’s stock has plummeted 76% year-to-date due to accounting challenges and a delayed annual report. However, the company is taking steps to overcome these issues, including naming a new auditor. Despite the uncertainty, Supermicro’s business continues to grow, with expected net sales of $5.9-6 billion in its fiscal first quarter, representing 180% year-over-year growth. With a forward price-to-earnings ratio of 6.3, the stock is considered cheap, but investors should weigh the pros and cons before considering a position.
Supermicro’s problem began with a scathing report from Hindenburg Research accusing it of accounting manipulation and self-dealing. The company delayed its annual report, putting it in danger of delisting from the Nasdaq Stock Market. However, Supermicro has named a new auditor, BDO, which will help it file its annual report and regain compliance.
The company’s business is still booming, with expected net sales of $5.9-6 billion in its fiscal first quarter, representing 180% year-over-year growth. This growth is driven by the demand for server makers that can convert artificial intelligence (AI) graphics processing units into consumer-ready computer servers.
While Supermicro’s stock is cheap at a forward price-to-earnings ratio of 6.3, investors should be cautious due to potential fallout from accounting-related uncertainty. The company’s core operations are not immune to this risk, and investors should carefully weigh the pros and cons before considering a position in the stock.
Source: https://finance.yahoo.com/news/super-micro-computer-millionaire-maker-170000997.html