Supermicro Filed Its Delayed Reports. Is It All Clear to Buy the Stock?

The company’s troubles appeared to impact its business, as Supermicro cut its fiscal first-quarter revenue guidance range to $5.9 billion to $6 billion from an earlier projection of $6 billion to $7 billion. Its fiscal Q1 revenue also later came up short of analysts’ consensus expectations with the company saying it would be between $5.6 billion and $5.7 billion, well below the consensus of $5.95 billion, as compiled by Bloomberg. Gross margin, meanwhile, remained weak, with the company saying it would be in the 11.8% to 11.9% range.

Now, the company has filed its reports, and here are some of the headline numbers:

Data source: Super Micro Computer.

Despite the apparent impact to its business, the stock nonetheless began to rally after the company named accounting giant BDO as its new auditor and later pledged that it would meet the deadline to file its reports to avoid being delisted from the Nasdaq.

With its filing on Feb. 25, the company says it’s now in compliance with Nasdaq listing requirements and that the matter is closed. Management also noted that there were no restatements to its previously filed financial statements.

While Supermicro was able to file its report and avoid being delisted, BDO did issue an “adverse opinion” on its internal controls over financial reporting. This means that it views the company’s internal controls as ineffective and that there is a good chance that any misstatements would not be detected.

A study has found that when auditing firms issue such opinions, they tend to get replaced and often see their businesses hurt. So the steps taken by BDO and especially EY were by no means taken lightly. Nor does the fact that Supermicro has filed the required reports with the SEC mean that the investigations by the Justice Department and SEC have gone away — although it also isn’t clear if they are still ongoing.

While Supermicro lowered its revenue guidance for its current fiscal year, it still has big ambitions for fiscal 2026, with a revenue target of $40 billion, up from a revenue forecast of between $23.5 billion and $25 billion for fiscal 2025. That type of growth potential and the stock’s cheap valuation (12.5 times forward P/E based on fiscal 2026 analysts’ estimates) are likely to attract investors to it.

That said, Supermicro is ultimately just a play on AI infrastructure. As such, I think investors who want exposure to that trend have plenty of other options beyond a low-margin systems integrator with a history of accounting issues.

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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Supermicro Filed Its Delayed Reports. Is It All Clear to Buy the Stock? was originally published by The Motley Fool