Rackable is right to be concerned about Super Micro. While both companies are growing revenues by more than 50% per year, Super Micro has stronger net income margins. In 2006, Rackable's margin was 3.2%, while Super Micro's was 5.5%. Why? I think Super Micro had to be efficient from its early years, since it never obtained venture capital.
The company's growth trajectory shows no signs of leveling out. Super Micro expects to launch its line of blade servers during the first half of 2007.
IPOs typically sell at relatively high valuations, but that's not the case here. Super Micro trades at roughly 13 times earnings, compared to Rackable's 42 times earnings. It's also a discount to the S&P 600 small-stock index multiple of 22 times earnings. So long as Super Micro can maintain its growth and profitability, its stock should be one to watch for small-cap-focused Fools.