What happened
Shares of Supermicro Computer (SMCI +3.18%), an IT solutions provider, jumped today after the company reported its third-quarter financial results. While the company missed analysts' consensus estimates for both its top and bottom lines, the company's reiteration of its full-year guidance made investors optimistic.
The tech stock was up by 27.9% as of 3:46 p.m. ET.
So what
Supermicro reported non-GAAP (adjusted) earnings of $1.63 for the quarter, which was up from $1.55 in the year-ago quarter but missed Wall Street's average estimate of $1.71. The company missed revenue estimates as well. Supermicro's sales fell nearly 6% to $1.28 billion and were below analysts' consensus estimate of $1.39 billion for the quarter.
NASDAQ: SMCI
Key Data Points
Supermicro's CEO Charles Liang said in a press release that the company secured several new design wins and continues to see record levels of engagement for its next-generation product lines, especially for artificial intelligence, adding:
"With the recent new key components supply chain challenges mostly in the rearview mirror and production normalizing, we expect to gain share and expand scale as we emerge as the true leader for rack-scale Total IT Solutions."
But with the company failing to meet Wall Street's expectations for the quarter, why did Supermicro's stock jump higher? That may have been the result of the company's management reiterating its strong guidance for the full year.
Management estimates that revenue for 2023 will range between $6.6 billion to $6.8 billion, which puts the midpoint of guidance ahead of analysts' average estimate of $6.69 billion. Additionally, Supermicro's non-GAAP earnings guidance of between $10.50 to $11.00 for the full year is better than the consensus estimate of $10.25 per share.
Now what
Adding to investors' optimism today is the fact that analysts from Loop Capital, Northland, and Susquehanna all raised their price targets for Supermicro's stock today.
And while it's surprising to see shares of a tech stock climb higher after missing analysts' consensus estimates, it's clear that investors believe that the company is still headed in the right direction.
