Financial Contrast: Super Micro Computer (SMCI) and Dell Technologies (DVMT)

Super Micro Computer (NASDAQ: SMCI) and Dell Technologies (NYSE:DVMT) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Profitability

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This table compares Super Micro Computer and Dell Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Super Micro Computer N/A N/A N/A
Dell Technologies -4.74% 23.17% 3.15%

Institutional and Insider Ownership

81.4% of Super Micro Computer shares are held by institutional investors. Comparatively, 23.1% of Dell Technologies shares are held by institutional investors. 23.6% of Super Micro Computer shares are held by company insiders. Comparatively, 45.0% of Dell Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Super Micro Computer has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500. Comparatively, Dell Technologies has a beta of -0.5, meaning that its stock price is 150% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Super Micro Computer and Dell Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Super Micro Computer 0 6 1 0 2.14
Dell Technologies 0 1 3 0 2.75

Super Micro Computer currently has a consensus target price of $28.83, suggesting a potential upside of 72.45%. Dell Technologies has a consensus target price of $110.00, suggesting a potential upside of 51.43%. Given Super Micro Computer’s higher possible upside, equities analysts clearly believe Super Micro Computer is more favorable than Dell Technologies.

Valuation and Earnings

This table compares Super Micro Computer and Dell Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Super Micro Computer $2.53 billion 0.32 $69.32 million $1.34 12.49
Dell Technologies $78.66 billion 0.71 -$3.73 billion $6.17 11.77

Super Micro Computer has higher earnings, but lower revenue than Dell Technologies. Dell Technologies is trading at a lower price-to-earnings ratio than Super Micro Computer, indicating that it is currently the more affordable of the two stocks.

Summary

Dell Technologies beats Super Micro Computer on 8 of the 14 factors compared between the two stocks.

Super Micro Computer Company Profile

Super Micro Computer, Inc., together with its subsidiaries, develops and provides high performance server solutions based on modular and open architecture. It offers a range of server, storage, blade, workstation, and full rack solutions, as well as networking devices, server management software, and technology support and services. The company also provides a range of application optimized server solutions, including rackmount and blade server systems; and server subsystems and accessories comprising server boards, and chassis and power supplies, as well as other system accessories, including microprocessors, and memory and disc drives. In addition, it provides customer support services and hardware enhanced services. The company offers its products to data center, cloud computing, enterprise IT, big data, high performance computing, and Internet of Things/embedded markets. It sells its server systems, and server subsystems and accessories through direct sales force, as well as through distributors that comprise value added resellers and system integrators, and OEMs. The company has operations primarily in San Jose, California; the Netherlands; Taiwan; China; and Japan. Super Micro Computer, Inc. was founded in 1993 and is headquartered in San Jose, California.

Dell Technologies Company Profile

Dell Technologies Inc., formerly Denali Holding Inc., is a provider of information technology solutions. The Company operates through two segments: Client Solutions and Enterprise Solutions Group (ESG). The Client Solutions segment includes sales to commercial and consumer customers of desktops, thin client products and notebooks, as well as services and third-party software and peripherals closely tied to the sale of Client Solutions hardware. Its offerings include hardware, such as desktop personal computers, notebooks and tablets, and peripherals, such as monitors, printers and projectors, as well as third-party software and peripherals. The ESG segment includes servers, networking and storage, as well as services and third-party software and peripherals that are closely tied to the sale of ESG hardware. It designs, develops, manufactures, markets, sells and supports a range of products and services.

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