Super Micro Computer: Still Too Many Issues To Reckon With (Archive)
SMCI’s accounting woes, capital raise risks, and customer losses overshadow seemingly fair valuations.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- Fundamentals deterioration and balance sheet quality are a concern as the company has net debt, negative cash flows, and is losing business from key customers such as NVIDIA.
- Super Micro Computer's private capital raise is likely to occur at a discount to market price, putting further pressure on the stock.
- SMCI's new auditor BDO (after the resignation of EY) has a patchy record with an audit deficiency rate of 86% in 2023, according to the Public Company Accounting Oversight Board.
- Valuations are near fair value, but the reliability of such analysis is undermined when the integrity of financial statement reporting is under question.
- A sideways rollover period is likely in the technical charts of SMCI vs. SPX500.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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