This Top Growth Stock Has Just Announced a 10-for-1 Stock Split: Here's Why You Should Be Buying It Hand Over Fist Right Now
Super Micro Computer (NASDAQ: SMCI) announced fiscal 2024 fourth-quarter results (for the quarter ended June 30) on Aug. 6, and the stock fell 20% as investors were concerned about the company's shrinking margin profile.
Supermicro's revenue shot up remarkably year over year, and its guidance for fiscal 2025 indicates that its stunning growth is here to stay. What's more, management announced a 10-for-1 stock split, which will go into effect on Oct. 1. Still, the fact that the company's earnings of $6.25 per share missed analysts' expectations of $8.12 per share by a mile sent the stock packing.
A stock split is nothing more than a cosmetic move that doesn't alter a company's fundamentals. So, expecting Supermicro stock to surge on this announcement when it failed to live up to Wall Street's expectations won't be logical. A stock split simply increases the outstanding share count of a company by reducing the price of each share. Its market cap remains the same.
Source Fool.com