SMCI Lost 18% In A Day. Do You Buy Or Wait?
Super Micro Computer (SMCI) stock is down 18.3% in a day. Already own the stock? You might want to consider holding it. Planning to buy? This might be your opportunity. Consider the following data:
- A $28 Bil company with $22 Bil in revenue currently trading at $46.79.
- Last 12 month revenue growth of 82.5% and operating margin of 6.1%.
- Has Debt to Equity ratio of 0.1 and Cash to Assets ratio of 0.2
- Currently trading at P/E multiple of 24.2 and P/EBIT multiple of 21.0
- Has returned (median) 33.5% within a year following sharp dips since 2010. See SMCI Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for SMCI, see Buy or Sell SMCI Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and SMCI drops another 20-30% to $32.75 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Super Micro Computer (SMCI) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock saw an impact slightly worse than the S&P 500 index during various economic downturns.
SMCI develops high-performance modular server and storage solutions for enterprise data centers, cloud computing, AI, 5G, and edge computing markets.
- Get Paid 8.6% to Buy GOOGL at a 30% Discount – Here’s How
- What Could Spark the Next Big Move In Netflix Stock
- Why Amazon.com Stock May Drop Soon
- Cash Rich, Low Price – Gartner Stock to Break Out?
- Does Johnson & Johnson Stock Have More Upside?
- Has American Water Works Stock Quietly Become a Value Opportunity?
2022 Inflation Shock
- SMCI stock fell 34.5% from a high of $35.33 on 7 August 2023 to $23.15 on 21 September 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 19 January 2024
- Since then, the stock increased to a high of $118.81 on 13 March 2024 , and currently trades at $46.79
| SMCI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.5% | -25.4% |
| Time to Full Recovery | 120 days | 464 days |
2020 Covid Pandemic
- SMCI stock fell 45.8% from a high of $2.95 on 5 February 2020 to $1.60 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 8 June 2020
| SMCI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -45.8% | -33.9% |
| Time to Full Recovery | 82 days | 148 days |
2018 Correction
- SMCI stock fell 59.6% from a high of $2.89 on 4 January 2017 to $1.17 on 8 November 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 January 2020
| SMCI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -59.6% | -19.8% |
| Time to Full Recovery | 440 days | 120 days |
2008 Global Financial Crisis
- SMCI stock fell 66.3% from a high of $1.14 on 5 June 2007 to $0.39 on 13 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 December 2009
| SMCI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -66.3% | -56.8% |
| Time to Full Recovery | 404 days | 1480 days |
Worried that SMCI could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.