Wall Street sets the SMCI stock price for the next 12 months

While Super Micro Computer (NASDAQ: SMCI) has experienced a series of disasters in recent months, both as a company and in the stock market, analysts have not been as bearish as might seem reasonable.

Notably, SMCI shares maintain a consensus rating of “Hold” on the stock research platform TipRanks, The average forecast predicts an increase of 18.17% to $38.57 over the next 12 months from the price at press time of $32.15.

The expectations are in stark contrast to the last six months, in which Supermicro shares fell 59.91% and its 2024 gains shrank to just 18.17% – up from 316.15% in May.

The situation – best described as better than expected given Supermicro’s situation – can potentially be attributed to a combination of factors, such as expressed confidence that the company will ultimately recover and a relative lack of new ones Price target revisions (PT).

Analysts update their price targets for SMCI shares

For example, in October and November, only five prominent institutions revised their SMCI ratings and forecasts: Barclays, Argus Research, Wedbush, JPMorgan (NYSE: JPM) and Goldman Sachs (NYSE: GS).

Additionally, three of the five ratings required maintaining a Neutral rating, and only one of the two downgrades – JPMorgan’s – was to Sell.

Still, the new price targets show that Wall Street experts have taken into account Supermicro’s current situation and not just its hopes for the future, as four of the five have downgraded guidance and Argus has not provided a price target at all.

In order from oldest to newest – the most recent is dated November 6 – Barclays revised its forecast to $42 from $438, Wedbush to $32 from $62, JPMorgan to $23 from $50 and Goldman to $67.5 $28.

The vast majority of analysts – including Wedbush’s Matt Bryson, JPMorgan’s Samik Chatterjee and Goldman Sachs’ Michael Ng – cited Supermicro’s compliance issues, weak preliminary earnings and weak and vague guidance as key reasons for their reratings.

Why SMCI Stock Is in Trouble

In fact, the main reason why the spate of “neutral” ratings and price target downgrades can be viewed as unexpectedly strong is the dire situation in which Super Micro Computer finds itself.

In August, Supermicro not only delayed its annual and quarterly reports to regulators, but was also the subject of a scathing report released by Hindenburg Research when it announced its short position.

This situation for the company and SMCI shares worsened in recent months as fears of a delisting became pervasive and the company’s long-time auditor – Ernst & Young – resigned.

The recent crash in Supermicro stock – which came just weeks after the arrival of a new auditor and sparked a sudden rebound – shows SMCI stock’s continued fragility and ongoing uncertainty.

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