SMCI Stock: Super Micro Computer (SMCI), a leading AI server maker, has announced it is unable to file its quarterly financial report on Form 10-Q for the period ending September 30, 2024, on time. This setback comes after the company encountered delays with its annual report earlier this month.

Additionally, Super Micro faces an even larger challenge as it struggles to secure a new auditor following the resignation of Ernst & Young in October, leaving the company without a trusted financial reviewer.

This delay has already caused a significant impact on Super Micro’s stock, with shares falling more than 3% in premarket trading.

The news follows a turbulent few months for the San Jose-based company, which has been in the spotlight for all the wrong reasons.

Earlier in the year, Super Micro’s stock soared by 1,400% between January and March 2024, but it has since plummeted by over 80% in the past eight months. The company’s troubles began with falling gross margins, driven by increased competition from industry giants like Dell and Hewlett-Packard Enterprise.

The situation worsened in August when short seller Hindenburg Research accused Super Micro of accounting fraud. Investors’ concerns deepened when the company revealed it was delaying its fiscal 2024 10-K filing.

Adding fuel to the fire, the Department of Justice launched an investigation into Super Micro’s financial practices, and Ernst & Young resigned, citing concerns over the company’s unclear financial statements.

Super Micro’s key client, Nvidia, is also reportedly seeking alternatives to avoid supply chain disruptions, further intensifying worries among investors.

Despite these challenges, Super Micro’s business growth has been impressive. The company posted a 109.8% year-over-year increase in sales for fiscal 2024, reaching $14.9 billion. However, its gross profit margin has taken a hit, narrowing from 18% in 2023 to 14.1% in 2024.

At present, Super Micro stock trades at just 7x forward earnings, making it an appealing option for investors looking for growth opportunities at a bargain price. However, analysts have become more cautious in their outlook, with many now rating the stock as a “Hold” rather than a “Moderate Buy.”

As Super Micro scrambles to regain financial stability and avoid being delisted from the Nasdaq, it faces a race against time to meet regulatory requirements.

If it fails to file its 10-K report or submit a plan to regain compliance by the end of this week, it risks being delisted for the second time, further eroding investor confidence.

For those considering investing in Super Micro, the current dip in stock price may present a high-risk, high-reward opportunity. Yet, as the company continues to face significant hurdles, it remains uncertain whether Super Micro can recover its previous momentum.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.