Roth Capital Initiates Buy On Super Micro Computer; Sees 21% Upside


In a research report issued yesterday, Roth Capital analyst Michael Staiger initiated a Buy rating on Super Micro Computer (NASDAQ:SMCI) with a price target of $35, which represents a potential upside of 21% from where the stock is currently trading.

Staiger wrote, “We view SMCI as a secular growth story, serving an expanding specialty market for cloud-based servers and system appliances. We believe the Grantley product cycle, the new partnership with VMware, and the software-defined hardware movement favor SMCI’s model. We believe this should support margin expansion and revenue growth from ramping customer engagements. Grantley product cycle to drive a server refresh cycle: We believe that Intel’s (INTC-Buy) Grantley server launch will drive a server upgrade cycle, and will also increase the number of customizable server SKUs relative to prior cycles, both of which favor SMCI. We also see the potential for continued growth in SMCI’s ASPs, partially driven by a higher end mix as well as more custom solutions. We believe this server cycle is partially factored into management guidance and Street estimates, but it could be more powerful than expectations, supporting additional increases to revenues and gross margin in F2015.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Staiger has a total average return of -2.8% and a 60.0% success rate. Staiger is ranked #2635 out of 3309 analysts.

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