The AI server maker delayed its 10-K as experts partly blame a recent spike in tardy annual reports on the accounting talent shortage and increased regulation.
Shares of AI server manufacturer Super Micro Computer dropped 19% on Wednesday following the company's announcement that it will delay its 10-K filing for the fiscal year ending June 30, 2024. The company stated it will file a notification of late filing on August 30.
According to the announcement, Super Micro needs more time to evaluate the design and effectiveness of its internal controls over financial reporting as of June 30, 2024. The company noted that it could not complete its annual report within the required timeframe without undue effort or expense.
This delay comes just one day after Hindenburg Research published a critical report alleging significant issues with the company, including questionable accounting practices, undisclosed related party transactions, compliance failures with sanctions and export controls, and problems with customers.
The recent report has placed short-seller Hindenburg in opposition to Super Micro, a company that CNBC describes as “one of the biggest beneficiaries of the generative AI boom.”
In response, JPMorgan analysts countered the allegations in a Tuesday note, suggesting that the report lacks substantive new details that would alter the medium-term outlook for Super Micro. They characterized the findings as reiterating existing concerns about corporate governance and transparency.
Super Micro is not unique in its delay: According to a March report by Intelligize, which specializes in regulatory insights and analytics, the number of public companies filing annual reports late surged by 40% compared to 2023. Ro Sokhi from the accounting firm UHY attributed this increase to a shortage of accounting professionals and heightened reporting requirements, which have created a “perfect storm” for delays in SEC filings.
Super Micro’s announcement also came as investors awaited Nvidia’s earnings report, with the options market predicting a potential 10% fluctuation in Nvidia’s stock price, Bloomberg reported.
Given the recent fluctuations in Super Micro Computer's (NASDAQ) share price, investors might find additional insights beneficial. According to InvestingPro data, Super Micro has demonstrated strong revenue growth, with a notable 109.77% increase over the past year as of Q4 2024, and an even more impressive quarterly revenue growth of 142.95% for Q4 2024. The company's market capitalization is substantial at $25.09 billion, underscoring its significant role in the industry.
InvestingPro Tips indicate that analysts are optimistic about Super Micro's future prospects, as reflected in upward revisions by six analysts for the company's earnings projections. Furthermore, Super Micro is currently trading at a relatively low P/E ratio of 19.69, which might suggest that the stock is undervalued given its strong revenue growth.
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