QS Research · Michael Burry's Scion Capital analyst template · 2006
Super Micro Computer, Inc. (SMCI)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -25% · upside +65%
Using section 13's TTM to Sep 30 2026 base and today's 3.4x EV/EBITDA (N28), the base value is (3.4 x $4.71B + $2.94B net cash) / 659.23M = $28.76, 0% from today (N15, N23, N5, N1); I do not borrow section 13's 2.0x-6.0x range because no cited non-valuation rerate justifies leaving today's multiple. The 5.8x P/E and 3.4x EV/EBITDA are not free: TTM operating cash flow is -$6.33B and FCF -$6.50B, so the earnings are not converting to distributable cash (N17, N19, N32, N31). A 30% EBITDA decline at the same 3.4x gives $21.46 (-25.4%), while annualizing Q1 FY2027 operating income of $2,064.5M plus $15.0M D&A gives $8.318B EBITDA and $47.36 (+64.7%) (S102, N23, N5, N1). The stock is therefore a watch, not a long: the upside needs Q1 run-rate and cash conversion, while the downside is a plausible margin/customer-concentration outcome.
Key numbers
- Share price: $28.76
- Market cap: $18.96B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $53.99B
- EV / EBITDA (TTM): 3.4x
- P/E (TTM): 5.8x
- Price / book: 1.60x
The 15 boxes
- ✓ 1. Long-form business notes
SMCI makes money selling server and storage systems and subsystems/accessories, with software management and global services revenue included in systems revenue, through direct and indirect channels. The FY2021 10-K described an application-optimized server/storage vendor; the FY2026 10-K describes a total data center infrastructure provider built around DCBBS and liquid-cooled AI racks. Revenue was $3.56B in FY2021 and $39.06B in FY2026, operating income $123.9M and $2.77B, while FY2026 operating cash flow was -$6.81B.
- ✓ 2. Competitive advantage
SMCI shows no durable competitive advantage in these sources. It grew revenue from $3.56B in FY2021 to $39.06B in FY2026 but gross margin fell from 18.0% in FY2023 to 10.8% in FY2026 and operating margin from 10.7% to 7.1%, the signature of an assembly business that competes on speed-to-market, price and capacity rather than on switching costs, licences or brand. The 10-K names Cisco, Dell, HPE and Lenovo plus ODMs Foxconn, Quanta and Wiwynn as competitors, says most of them have significantly greater resources and name recognition, and warns that large orders face intense pricing pressure. Scale has not converted into cash: operating cash flow was -$6.81B in FY2026 against capex of only $162.0M, with the cash going into working capital, while the company buys key components on purchase orders and depends on two affiliated contract manufacturers.
- ✓ 3. 10-Q takeaways
The latest 10-Q risk-factor update says there have been no material changes from the FY2026 10-K risk factors, and the provided 10-Q MD&A text does not include the actual quarterly financials. The same-quarter 8-K preliminary update gives Q1 FY2027 revenue estimated at $18.5 billion to $19.5 billion versus $14.5 billion to $15.5 billion guidance and gross margin at 12.0% to 12.5% versus 10.4% to 10.8% guidance. Those figures are preliminary and unaudited; no 10-Q inventory, cash or buyback data is in the sources.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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