In the world of growth stocks, NASDAQ:SMCI shines as a value proposition.

Consider SUPER MICRO COMPUTER INC (NASDAQ:SMCI) as an affordable growth stock, identified by our stock screening tool. NASDAQ:SMCI is showcasing impressive growth figures and is well-positioned in terms of profitability, solvency, and liquidity. Moreover, it seems to be priced reasonably. Let's dive deeper into the analysis.

Exploring NASDAQ:SMCI's Growth

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:SMCI has received a 9 out of 10:

• The Earnings Per Share has grown by an impressive 39.67% over the past year.
• Measured over the past years, SMCI shows a very strong growth in Earnings Per Share. The EPS has been growing by 67.00% on average per year.
• The Revenue has grown by 22.87% in the past year. This is a very strong growth!
• Measured over the past years, SMCI shows a quite strong growth in Revenue. The Revenue has been growing by 16.21% on average per year.
• SMCI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.96% yearly.
• The Revenue is expected to grow by 23.36% on average over the next years. This is a very strong growth
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

How We Gauge Valuation for NASDAQ:SMCI

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:SMCI was assigned a score of 6 for valuation:

• 66.67% of the companies in the same industry are more expensive than SMCI, based on the Price/Earnings ratio.
• 63.64% of the companies in the same industry are more expensive than SMCI, based on the Price/Forward Earnings ratio.
• SMCI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 19.65, which is the current average of the S&P500 Index.
• SMCI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SMCI is cheaper than 66.67% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• SMCI has an outstanding profitability rating, which may justify a higher PE ratio.
• A more expensive valuation may be justified as SMCI's earnings are expected to grow with 29.96% in the coming years.

Deciphering NASDAQ:SMCI's Health Rating

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:SMCI, the assigned 8 reflects its health status:

• An Altman-Z score of 8.23 indicates that SMCI is not in any danger for bankruptcy at the moment.
• The Altman-Z score of SMCI (8.23) is better than 90.91% of its industry peers.
• The Debt to FCF ratio of SMCI is 0.25, which is an excellent value as it means it would take SMCI, only 0.25 years of fcf income to pay off all of its debts.
• SMCI has a better Debt to FCF ratio (0.25) than 90.91% of its industry peers.
• SMCI has a Debt/Equity ratio of 0.05. This is a healthy value indicating a solid balance between debt and equity.
• The Debt to Equity ratio of SMCI (0.05) is better than 60.61% of its industry peers.
• SMCI has a Current Ratio of 2.23. This indicates that SMCI is financially healthy and has no problem in meeting its short term obligations.
• SMCI does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Profitability Examination for NASDAQ:SMCI

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:SMCI scores a 8 out of 10:

• SMCI has a Return On Assets of 14.96%. This is amongst the best in the industry. SMCI outperforms 93.94% of its industry peers.
• Looking at the Return On Equity, with a value of 28.29%, SMCI belongs to the top of the industry, outperforming 93.94% of the companies in the same industry.
• SMCI has a better Return On Invested Capital (24.29%) than 90.91% of its industry peers.
• SMCI had an Average Return On Invested Capital over the past 3 years of 17.60%. This is above the industry average of 14.54%.
• The 3 year average ROIC (17.60%) for SMCI is below the current ROIC(24.29%), indicating increased profibility in the last year.
• SMCI's Profit Margin of 8.29% is amongst the best of the industry. SMCI outperforms 90.91% of its industry peers.
• SMCI's Profit Margin has improved in the last couple of years.
• SMCI's Operating Margin of 9.65% is amongst the best of the industry. SMCI outperforms 81.82% of its industry peers.
• In the last couple of years the Operating Margin of SMCI has grown nicely.
• SMCI's Gross Margin has improved in the last couple of years.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of SMCI for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.