Sep. 10 at 6:05 AM
$SMCI So something ive always forgotten to do is actually incorporating total equity into the PE ratio, because realistically if a company owns assets then that should be taken into consideration when valuing a company.
SMCI's
$25B valuation includes roughly
$14B of existing shareholder equity, leaving only
$11B of market premium over book value. At
$4.40–
$5.50 FY EPS, that premium is only about 3.1x to 3.8x projected earnings.
$DELL, by comparison, commands a
$340B valuation despite roughly negative book value, meaning essentially its entire valuation rests on the market's expectation of future cash flows rather than existing value.
For
$HPE for instance their total equity is
$24B and their market cap is
$74B so roughly
$50B is expectation of future earnings. At a roughly similar forward EPS to SMCI, there is a massive mismatch in valuation here.
