Top Analyst: Super Micro Computer, Inc. (SMCI) Appears Back On Growth Trajectory


Roth Capital’s top analyst Brian Alger is out this morning with a new research note on Super Micro Computer, Inc. (NASDAQ:SMCI), after the high-end server maker posted a strong December quarter with revenues above the high end of the guidance range. Guidance for the March quarter implies 12.6% growth Y/Y, driven by more diversified demand across the company’s product portfolio.

In reaction, shares of Super Micro are up around 5% to $30.05 on Friday morning.

Alger commented, “Given the improved customer and end market diversification, as well as the more stable IT spending environment, we believe the risks to our model are predominantly to the upside.”

“Coming into the earnings release, we had noted the risk of a potential pause in demand ahead of the Skylake launch from Intel. We believe management adequately addressed that question on the call and moreover expects to see meaningful contribution to its growth beginning in the September quarter,” the analyst added.

As a result, Alger reiterates a Buy rating on Super Micro shares, while slightly raising the price target to $33 (from $32), which implies an upside of 16% from current levels.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Brian Alger has a yearly average return of 27% and a 74% success rate. Alger has a -14.1% average return when recommending SMCI, and is ranked #99 out of 4378 analysts.

Out of the 7 analysts polled in the past 12 months, 5 rate Super Micro Computer stock a Buy, while 2 rate the stock a Hold. With a return potential of 8.6%, the stock’s consensus target price stands at $31.

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