Bullish: Analysts Just Made A Notable Upgrade To Their Super Micro Computer, Inc. (NASDAQ:SMCI) Forecasts

Super Micro Computer, Inc. (NASDAQ:SMCI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Super Micro Computer has also found favour with investors, with the stock up a notable 11% to US$530 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the most recent consensus for Super Micro Computer from its nine analysts is for revenues of US$14b in 2024 which, if met, would be a major 56% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 50% to US$19.62. Before this latest update, the analysts had been forecasting revenues of US$11b and earnings per share (EPS) of US$16.12 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Super Micro Computer

It will come as no surprise to learn that the analysts have increased their price target for Super Micro Computer 45% to US$568 on the back of these upgrades.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Super Micro Computer's rate of growth is expected to accelerate meaningfully, with the forecast 144% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 21% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Super Micro Computer is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Super Micro Computer.

Analysts are definitely bullish on Super Micro Computer, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 3 other risks we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.