Why Super Micro Computer’s (SMCI) Delisting Risk Just Shot Up
Super Micro Computer (SMCI) has been struggling lately, and it seems like its struggles are set to continue. Indeed, the computer hardware manufacturer recently announced that it was delaying its quarterly report for the period ending September 30. This delay is due to the ongoing internal review and the recent resignation of the firm’s auditor. As a result, Super Micro is now at an increased risk of being delisted from the Nasdaq (NDAQ) exchange.
To avoid this, the company has until November 16 to file the reports or submit a plan to get back in compliance. However, if the stock does get delisted, Super Micro shares would end up trading on the pink sheets, which refers to over-the-counter exchanges where trading is less liquid and can be more expensive.
Nevertheless, it is worth mentioning that Super Micro has been delisted before, in 2018. Indeed, shares initially dropped but recovered 73% by the time it was relisted in 2020. Still, analysts like Wedbush’s Matt Bryson and Morgan Stanley’s Erik Woodring are now warning that this public setback could hurt Super Micro’s customer relationships, which could potentially benefit competitors like Dell (DELL).
Is SMCI Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on SMCI stock based on three Buys, six Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 26% year-to-date decline, the average SMCI price target of $47.04 per share implies 126% upside potential.
