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Why the Earnings Streak Will Continue for Super Micro Computer (SMCI)

Looking for a stock that might be in a good position to beat earnings at its next report? Consider Super Micro Computer, Inc. (SMCI), a firm in the Computer- Storage Devices industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, SMCI has beaten estimates by at least 5% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, SMCI expected to post earnings of 12 cents per share, while it actually produced earnings of 13 cents per share, a beat of 8.3%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 15 cents per share, when it actually produced earnings of 26 cents per share instead, representing a 73.3% positive surprise.

SUPER MICRO COM Price and EPS Surprise

SUPER MICRO COM Price and EPS Surprise | SUPER MICRO COM Quote

Thanks in part to this history, recent estimates have been moving higher for Super Micro Computer. In fact, the Earnings ESP for SMCI is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company's earnings prospects. This is the case for SMCI as the firm currently has a Zacks Earnings ESP of 4.76%, so another beat could be around the corner.

This is particularly true when you consider that SMCI has a great Zacks Rank #2 (Buy) which can be a harbinger of outperformance and a signal for a strong earnings profile. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

When you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that SMCI could see another beat at its next report, especially if recent trends are any guide.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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