Shares of Super Micro Computer (SMCI, Financial) declined by 6.34% to a recent price of $30.85. The drop in stock price is attributed to the company's third-quarter 2025 earnings report, which fell short of market expectations.
Super Micro Computer (SMCI, Financial) reported an adjusted earnings per share (EPS) of $0.31 and revenue of $4.60 billion for the third quarter of 2025, missing Wall Street’s predictions of $0.50 EPS and $5.42 billion in revenue. This confirmation of a weak quarter has likely contributed to the decline in stock value.
Despite achieving a 19% year-over-year sales growth, the company's net income fell significantly from $402 million in Q3 2024 to $109 million in Q3 2025. The gross margin also decreased from 15.5% to 9.6%, indicating challenges in maintaining profitability amidst increased sales.
The company’s forward guidance further added to investor concerns. Supermicro projected fourth-quarter adjusted EPS between $0.40 and $0.50, with anticipated sales ranging from $5.6 billion to $6.4 billion. These figures were below Wall Street's expectations of $0.69 EPS and $6.82 billion in revenue. Additionally, the company refrained from providing guidance for 2026, attributing the decision to uncertainties related to tariffs.
From a valuation perspective, Super Micro Computer (SMCI, Financial) maintains a price-earnings (PE) ratio of 16.23 and a price-to-book (PB) ratio of 2.89. The company's GF Value suggests it is modestly undervalued at a GF Value estimate of $43.68, indicating potential upside from current levels. However, the firm carries warning signs such as a Beneish M-Score indicating possible financial manipulation and a Sloan Ratio pointing to poor quality of earnings. Despite these challenges, the company exhibits strong financial strength with an Altman Z-Score of 6.37.
