Proactive Investors - Analysts at Wedbush have slashed their price target on Super Micro Computer Inc (NASDAQ:SMCI) following disappointing quarterly results from the computing firm.
They lowered their price target from $800 to $620 and repeated their ‘Neutral’ rating.
Shares of Super Micro plunged almost 17% at about $513 in the early afternoon on Wednesday.
“Super Micro Computer’s results disappointed with management attributing the majority of the miss to an abrupt shift towards liquid cooled systems,” the Wedbush analysts wrote.
The company indicated that $800 million in sales were pushed into the first quarter as it was unable to procure enough components to support this sharp customer shift toward liquid cooled servers.
However, the analysts noted that management provided what they see as “significantly more optimistic guidance.”
Super Micro forecast fiscal first quarter revenue of $6 billion to $7 billion, above the prior consensus outlook for a slight lift.
Revenue for fiscal 2025 is expected to lift $26 billion to $30 billion, with management saying this guide is conservative.
Gross margins are expected to lift throughout the year, with 100 basis points of implied improvement in fiscal Q1, and return to the target model by the year-end.
“We view Super Micro Computer’s revenue guidance as a meaningful positive and would note that management has a history of guiding to seemingly fantastic revenues off of quarters restricted by supply and then delivering,” analysts wrote.
“At the same time, we are also somewhat more hesitant to believe management's assertion gross margins will rebound given what we believe will remain competitive market dynamics moving forward for AI server share.”