Bernstein SocGen Group Lowers Super Micro Computer Price Target to $37
Bernstein SocGen Group analyst Mark C. Newman lowered the price target on Super Micro Computer (NASDAQ: SMCI) to $37.00 (from $42.00) while maintaining a Market Perform rating.
“Finally a revenue beat, but will gross margins ever recover? FQ2’26 results beat powered by a significant revenue uptick (finally!) as gross margins tumble.
Revenue came in at $12.7B (vs consensus at $10.4B and guidance of $10-11B) up 123% YoY and 153% QoQ.
FQ2 included approximately $1.5B of shipments deferred from Q1 due to customer readiness issues, which resulted in the FQ1 miss.
One large customer accounted for a large portion of growth (we think xAI) and 63% of revenue, which seems to be the main reason for the gross margin collapse to 6.4% (down from 9.5% in FQ1) with no reason to expect it to go back to the double digits anytime soon.
Overall though EPS came in better than us and consensus at $0.69 (non-GAAP). This was also above guidance and the first beat after 6 consecutive misses.
On net, we increase our estimates on higher revenue, offset by lower gross margins.
Although the company has a miserable track record of 6 misses out of the last 7 quarters, we give the company some benefit of the doubt that revenue growth will re-accelerate.
Our FY27 EPS lands at $2.67 (up from $2.59) vs. consensus at $3.04.”
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