SMCI stock ‘in penalty box’ after 10-K delay: Barclays

Barclays analysts noted on Thursday that Super Micro Computer (NASDAQ:) finds itself under pressure following the announcement of a delay in filing its 10-K annual report.

The company revealed that it would not meet the Thursday (August 29) deadline for filing its 10-K, citing the need for more time to assess its internal controls over financial reporting.

The bank’s analysts believe that this delay is likely to increase scrutiny on SMCI’s corporate governance and internal control practices.

“We think it may raise more scrutiny on its corporate governance and internal control matters,” Barclays wrote, adding that this is particularly in light of SMCI’s temporary delisting from Nasdaq in 2018, which already had investors wary of its governance standards.

“We caught up with SMCI management this morning. Management believes that the fundamental business remains strong and that they just need more time to assess internal controls and governance. Management says SMCI is fully in compliance with export controls,” added Barclays.

Despite these reassurances, Barclays analysts express concern that the delay could leave SMCI shares “in the penalty box” in the near term, as investors are likely to remain cautious until the company can provide more concrete proof of margin improvements.

Barclays also highlighted potential challenges ahead for SMCI, particularly regarding pricing trends and competition.

“While component constraints and expedite fees should largely get alleviated by Dec-Q, competitive pricing trends should take a bit longer to normalize,” the analysts said, pointing out that SMCI may have been offering significant discounts to secure large orders, which could further pressure margins.