UPDATE: Stifel Downgrades Super Micro Computer (SMCI) to Hold
Stifel downgraded Super Micro Computer (NASDAQ: SMCI) from Buy to Hold and removed its price target (prior $35.00). The change follows the company's negative preannouncement.
"While we previously maintained our belief that the fundamental story had not materially changed after prior negative pre-announcements from Supermicro, given the significant 14% revenue shortfall (i.e. difference of $88 million between $522 million mid point of revised guidance vs. $610 million mid-point of original guidance and our prior estimate at $628.6 million) combined with lack of consistency in operating results and mis-execution, we are downgrading the stock to Hold until we can get further color on improving fundamentals," said analyst Aaron C. Rakers.
The analyst added, "While we have not yet received additional color from the company beyond the press release, we / investors are left to gauge whether the revenue shortfall was driven primarily by one large customer (i.e. IBM Softlayer) or whether it was more widespread. Recall that Softlayer comprised 43% of Supermicro’s IDC (Internet Data Center) revenue and 10% of the company’s total revenue over the TTM. In addition, given the wide range of causes of the revenue shortfall (ranging from pricing, to delayed purchase decisions from large customers to shipping delays / mis-execution), we / investors are left to gauge whether it was primarily a self-inflected wound or due to one or more customers pushing out an order to a later quarter. Finally, we will be focused on whether the challenges in the June quarter will result in any long-term damage to the company’s reputation and relationships with its customers and partners. Recall that Supermicro is an arms dealer to several hyperconverged and software-defined storage startups."
For an analyst ratings summary and ratings history on Super Micro Computer click here. For more ratings news on Super Micro Computer click here.
Shares of Super Micro Computer closed at $26.34 yesterday.