As of June 12, 2025, Super Micro Computer Inc's estimated intrinsic value ranges from $16.40 to $94.45 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $94.45 | +118.6% |
| Discounted Cash Flow (5Y) | $81.92 | +89.6% |
| Dividend Discount Model (Multi-Stage) | $67.44 | +56.1% |
| Dividend Discount Model (Stable) | $46.48 | +7.6% |
| Earnings Power Value | $16.40 | -62.0% |
Is Super Micro Computer Inc (SMCI) undervalued or overvalued?
With the current market price at $43.21, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Super Micro Computer Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.65 | 0.79 |
| Cost of equity | 6.9% | 9.3% |
| Cost of debt | 4.5% | 4.8% |
| Tax rate | 5.6% | 9.4% |
| Debt/Equity ratio | 0.09 | 0.09 |
| After-tax WACC | 6.7% | 8.9% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $82 | $48,847M | 84.3% |
| 10-Year Growth | $94 | $56,324M | 69.7% |
| 5-Year EBITDA | $33 | $19,843M | 61.4% |
| 10-Year EBITDA | $48 | $28,736M | 40.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $743M |
| Discount Rate (WACC) | 8.9% - 6.7% |
| Enterprise Value | $8,337M - $11,152M |
| Net Debt | $(44)M |
| Equity Value | $8,380M - $11,196M |
| Outstanding Shares | 597M |
| Fair Value | $14 - $19 |
| Selected Fair Value | $16.40 |
| Metric | Value |
|---|---|
| Market Capitalization | $25789M |
| Enterprise Value | $25745M |
| Trailing P/E | 22.41 |
| Forward P/E | 17.37 |
| Trailing EV/EBITDA | 5.70 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.09 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $28.33 |
| Discounted Cash Flow (5Y) | 25% | $20.48 |
| Dividend Discount Model (Multi-Stage) | 20% | $13.49 |
| Dividend Discount Model (Stable) | 15% | $6.97 |
| Earnings Power Value | 10% | $1.64 |
| Weighted Average | 100% | $70.91 |
Based on our comprehensive valuation analysis, Super Micro Computer Inc's weighted average intrinsic value is $70.91, which is approximately 64.1% above the current market price of $43.21.
Key investment considerations:
Given these factors, we believe Super Micro Computer Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.