We See Attractive Risk/Reward In SMCI Shares, Says Roth Capital

In a research report issued today, Roth Capital analyst Michael Staiger reiterated a Buy rating on Super Micro Computer (NASDAQ:SMCI) with a $35 price target, following the company’s 2Q15 earnings update.

Staiger wrote, “SMCI beat our ST high $423.8M revenue estimate, growing topline 3.6% sequentially and 29.1% yoy to $443.3M. Results were driven by a stronger mix of fully configured server systems that contained gross margin, but was still above our 15.5% estimate. We believe Grantley tailwinds are multi-quarter and are expecting building momentum from VMW’s EVO:RAIL program into F2015.”

The analyst added, “SMCI is currently trading at 0.76x TTM EV/revenue vs. the traditional data-center peer average of ~2.0x. Although shares are down from recent highs, we would add to positions considering we are in the early innings of (1) a multi quarter Grantley server product cycle (2) anticipate contributions from its VMware (VMW, NC) partnership and (3) see an ongoing shift to purpose built appliances for software-defined data center architecture that favors SMCI’s model.”

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 1.3% and a 57.1% success rate. Staiger has a 1.5% average return when recommending SMCI, and is ranked #2079 out of 3337 analysts.

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