Critical Survey: Switch (SWCH) versus Super Micro Computer (SMCI)
Switch (NYSE: SWCH) and Super Micro Computer (NASDAQ:SMCI) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, institutional ownership and analyst recommendations.
Valuation & Earnings
This table compares Switch and Super Micro Computer’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Switch||$318.35 million||12.89||$31.36 million||N/A||N/A|
|Super Micro Computer||$2.53 billion||0.42||$69.32 million||$1.34||16.46|
Insider & Institutional Ownership
80.6% of Super Micro Computer shares are owned by institutional investors. 24.0% of Super Micro Computer shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a breakdown of current ratings and recommmendations for Switch and Super Micro Computer, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Super Micro Computer||0||6||3||0||2.33|
Switch currently has a consensus price target of $22.20, suggesting a potential upside of 36.62%. Super Micro Computer has a consensus price target of $28.71, suggesting a potential upside of 30.22%. Given Switch’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Switch is more favorable than Super Micro Computer.
This table compares Switch and Super Micro Computer’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Super Micro Computer||2.74%||9.08%||5.08%|
Super Micro Computer beats Switch on 7 of the 11 factors compared between the two stocks.
Switch Company Profile
Switch, Inc. is a technology infrastructure company. The Company is developer and operator of the SUPERNAP, data center facilities, and provides colocation, telecommunications, cloud services, and content ecosystems. The Company designs, constructs and operates hyperscale data centers that address the growing challenges facing the data center industry. The Company’s patented technologies include 100% hot aisle containment rows, exterior wall penetrating multi-mode HVAC units, hot and cold containment segregation structure, redundant data center roofing system, multi-system power containers, data center infrastructure management system (DCIM).
Super Micro Computer Company Profile
Super Micro Computer, Inc. is engaged in developing and providing end-to-end green computing solutions to the cloud computing, data center, enterprise information technology (IT), big data, high performance computing (HPC) and Internet of Things (IoT)/embedded markets. The Company’s solutions range from server, storage, blade and workstations to full racks, networking devices, server management software and technology support and services. The Company sells its server systems and server subsystems and accessories through a combination of distributors, including value added resellers and system integrators, and other equipment manufacturers (OEMs). As of June 30, 2016, the Company offered over 4,950 stock keeping units (SKUs), including SKUs for server and storage systems, serverboards, chassis, power supplies and other system accessories. The Company develops and manufactures server solutions based upon a modular and open architecture.
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