Critical Review: Super Micro Computer (NASDAQ:SMCI) versus Quantum (NASDAQ:QMCO)

Super Micro Computer (NASDAQ:SMCI) and Quantum (NASDAQ:QMCO) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Super Micro Computer and Quantum, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Super Micro Computer	2	10	7	1	2.35
Quantum	0	2	1	0	2.33

Super Micro Computer presently has a consensus price target of $46.06, suggesting a potential downside of 5.04%. Quantum has a consensus price target of $19.00, suggesting a potential upside of 110.41%. Given Quantum’s higher possible upside, analysts plainly believe Quantum is more favorable than Super Micro Computer.

Risk and Volatility

Super Micro Computer has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Quantum has a beta of 2.69, indicating that its share price is 169% more volatile than the S&P 500.

Profitability

This table compares Super Micro Computer and Quantum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Super Micro Computer	5.61%	20.41%	11.86%
Quantum	N/A	N/A	N/A

Valuation and Earnings

This table compares Super Micro Computer and Quantum”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Super Micro Computer	$14.94 billion	1.94	$1.15 billion	$1.90	25.53
Quantum	$311.60 million	0.20	-$41.29 million	N/A	N/A

Super Micro Computer has higher revenue and earnings than Quantum.

Insider & Institutional Ownership

84.1% of Super Micro Computer shares are held by institutional investors. Comparatively, 63.7% of Quantum shares are held by institutional investors. 17.6% of Super Micro Computer shares are held by company insiders. Comparatively, 4.5% of Quantum shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Super Micro Computer beats Quantum on 11 of the 13 factors compared between the two stocks.

About Super Micro Computer

Super Micro Computer, Inc., together with its subsidiaries, develops and manufactures high performance server and storage solutions based on modular and open architecture in the United States, Europe, Asia, and internationally. Its solutions range from complete server, storage systems, modular blade servers, blades, workstations, full racks, networking devices, server sub-systems, server management software, and security software. The company provides application-optimized server solutions, rackmount and blade servers, storage, and subsystems and accessories; and server software management solutions, such as Server Management Suite, including Supermicro Server Manager, Supermicro Power Management software, Supermicro Update Manager, SuperCloud Composer, and SuperDoctor 5. In addition, it offers server subsystems and accessories comprising server boards, chassis, power supplies, and other accessories. Further, the company provides server and storage system integration, configuration, and software upgrade and update services; and technical documentation services, as well as identifies service requirements, creates and executes project plans, and conducts verification testing and technical documentation, and training services. Additionally, it offers help desk and on-site product support services for its server and storage systems; and customer support services, including ongoing maintenance and technical support for its products. The company provides its products to enterprise data centers, cloud computing, artificial intelligence, and 5G and edge computing markets. It sells its products through direct and indirect sales force, distributors, value-added resellers, system integrators, and original equipment manufacturers. The company was incorporated in 1993 and is headquartered in San Jose, California.

About Quantum

Quantum Corporation provides products for storing and managing digital video and unstructured data in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers Myriad All-Flash File and Object Storage Software for high performance enterprise unstructured data applications such as AI, machine learning, and data analytics; Unified Surveillance Platform Software that unified compute and storage for video surveillance recording, storage, and analytics; StorNext Hybrid Flash/Disk File Storage Software for video editing, post-production, and streaming applications, as well as digital file archives; and CatDV Asset Management Software for indexing, cataloging, enriching video, audio, and image files, and workflow orchestration. It also provides ActiveScale Object Storage Software that scalable and durable storage for long term data preservation and protection; DXi Backup Appliances to build backup appliances for high-speed backup and recovery and multisite data protection; and Scalar Tape Storage that secure storage for long term data archiving and offline data protection which are used by hyperscalers and enterprises. In addition, the company sells linear tape-open (LTO) a tape drives for small business data protection and archiving; and LTO media for use in tape storage systems. Further, it offers global support, managed services, customer support agreements, software subscriptions, installation, education, and consulting and training services, as well as Quantum-as-a-Service. The company sells its products through a network of distributors, value-added resellers, direct marketing resellers, original equipment manufacturers, and other suppliers, as well as directly to corporate entities and government agencies. It has a partnership with Tiger Surveillance to deliver end-to-end solutions for long-term retention and archiving of video surveillance data. Quantum Corporation was founded in 1980 and is headquartered in San Jose, California.