Would You Still Hold Super Micro Computer Stock If It Fell Another 30%?
Super Micro Computer (SMCI) stock is down 31.0% in 21 trading days. The recent slide reflects concerns over increased AI server market competition and contracting margins after an earnings miss, but sharp drops often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Super Micro Computer stands today.
- Size: Super Micro Computer is a $20 Bil company with $21 Bil in revenue currently trading at $33.32.
- Fundamentals: Last 12 month revenue growth of 11.9% and operating margin of 4.4%.
- Liquidity: Has Debt to Equity ratio of 0.24 and Cash to Assets ratio of 0.29
- Valuation: Super Micro Computer stock is currently trading at P/E multiple of 25.0 and P/EBIT multiple of 20.1
- Has returned (median) 30.9% within a year following sharp dips since 2010. See SMCI Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside Moderate valuation – making the stock Fairly Priced. For details, see Buy or Sell SMCI Stock
That brings us to the key consideration for investors worried about this fall: how resilient is SMCI stock if markets turn south? This is where our downturn resilience framework comes in. Suppose SMCI stock falls another 20-30% to $23 – can investors comfortably hold on? Turns out, the stock saw an impact slightly worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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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 $33.32
| 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 |
Feeling jittery about SMCI stock? Consider portfolio approach.
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Individual stocks can soar or tank but one thing matters: staying invested. The right portfolio can help you stay invested, capture upside and mitigate the downside associated with any individual stock.
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