Barclays downgraded SMCI to "equal weight" from "overweight"
Super Micro Computer Inc (NASDAQ:SMCI) stock is 3.5% lower before the opening bell after Barclays downgraded it to "equal weight" from "overweight" and cut its price target to $438 from $693. The analyst pointed toward the server maker's future prospects amid declining gross margins, ongoing customer losses, and internal controls issues.
Concerning SMCI's recent performance, it's lost nearly 43% over the last three months, though it still maintains a 55.4% year-to-date lead. Looking to open around the $428 area, the security is trading well below its March 8 all-time high of $1,229, and is below all noteworthy short- and long-term moving averages.
Coming into today, six of the 12 covering brokerages still rated Super Micro Computer stock a "strong buy." Plus, the 12-month consensus target price of $850.42 is a 98.9% premium to last night's close. This leaves plenty of room for more downgrades and/or price-target cuts.
An unwinding of optimism in the options pits could also weigh on the shares, as their Schaeffer's put/call open interest ratio of 0.70 ranks in the lowest percentile of readings from the past 12 months -- meaning there has been preference for calls among short-term premium traders.