Super Micro Computer stock fell today and is now down 67.5% from its high — Is it time to buy before the stock split?

Super Micro Computer (SMCI -6.79%) shares were once again destroyed in trading on Friday. The server company’s share price ended the session down 6.8%, according to data from S&P Global Market Intelligence.

Supermicro’s latest slide followed news that JPMorganAnalysts cut their rating on the stock from overweight to neutral and cut their price target from $950 per share to $500 per share. Additionally, the Labor Department’s jobs report on Friday showed that just 142,000 jobs were added to the U.S. economy in August, below Wall Street’s expectation that 160,000 jobs would be added.

Supermicro’s share price is now down 67.5% from its high earlier this year. Should investors consider buying shares ahead of the company’s October 1st stock split?

Supermicro stock is a buy for risk-tolerant investors

Super Micro Computer has recently been hit by a series of declining news events. The company’s fiscal fourth-quarter report arrived in early August with margins that spooked the market and indicated some growing competitive pressures. Then, in late August, Hindenburg Research published a short scathing report on the stock. Supermicro also announced that it is delaying the filing of its 10-K report for fiscal year 2024, which ended on June 30.

Now, JPMorgan has downgraded the stock and dramatically cut its price target.

Bearish indicators seem to be piling up, but I think the significance of some of them is overstated. For starters, investors should keep in mind that Hindenburg Research is a short seller who profits when a stock it has bet on declines. In addition, Supermicro reiterated that it does not expect to make any material changes to the results it has already reported for fiscal 2024.

And Friday’s note from JPMorgan? While the company lowered its price target, its new 12-month forecast for a price of $500 per share still suggests an upside of about 29% from Friday’s closing price.

Supermicro isn’t a low-risk stock, but the stock, trading at about 11 times this year’s expected earnings, looks cheaply valued. For investors with a higher tolerance for risk and volatility, buying shares at these levels could pay off big down the road.