Value- SMCI
The stock was up over 1000% in one year when it hit $1250 ! The huge question is, as the growth slows, how does one re value the stock ?. I mean, during the huge revenue growth story up, the PE went from 10 to 40- However, now that SMCI posted lower revenues than expected for Q1 from "stiff competition", I believe it needs to be re valued. In other words, SMCI growth story likely saw it's peak, while they had a near monopoly. Now that they have stiff competition, why should the stock demand the same valuation ? It wouldn't. Therefore I believe it's hard to value SMCI right now. What we do know is, SMCI should no longer be valued at a 40 PE going forward. My feeling is, a PE of 20-25 at most is a generous valuation now that they have this stiff competition. With eps expected to be around $32-$35 going forward, I would be careful about giving the stock higher than a $700 target.
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