Super Micro Computer Faces Pressure After 10-K Filing Delay
Barclays analysts noted on Thursday that Super Micro Computer (NASDAQ:SMCI) is under pressure following a delay in filing its 10-K annual report.
The company announced it would not meet the August 29 deadline for its 10-K, citing the need for additional time to assess its internal controls over financial reporting.
Analysts at Barclays believe this delay will likely increase scrutiny regarding SMCI’s corporate governance and internal control practices. They stated, “We think it may raise more scrutiny on its corporate governance and internal control matters,” especially given SMCI’s temporary Nasdaq delisting in 2018, which had already led to investor concerns about its governance standards.
After discussions with SMCI management, Barclays reported that the management believes the company’s fundamental business remains strong and that they require more time to evaluate internal controls and governance. They assured that SMCI is fully compliant with export controls.
Despite these reassurances, Barclays analysts indicate the delay might leave SMCI shares “in the penalty box” in the short term, as investor caution is expected until the company can provide concrete proof of margin improvements.
Barclays also pointed out potential challenges for SMCI, particularly concerning pricing trends and competition. They noted that while component constraints and expedite fees should largely improve by the December quarter, competitive pricing normalization might take longer. Analysts mentioned that SMCI may have been offering significant discounts to secure large orders, putting additional pressure on margins.
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