Seagate Technology: A Focus on Growth Amid Market Fluctuations
Company Overview and Market Performance
Valued at a market cap of $21.5 billion, Seagate Technology Holdings plc (STX) is a top player in data storage solutions. The company provides hard disk drives (HDDs), solid-state drives (SSDs), and hybrid storage products for enterprise, cloud, and consumer needs. Headquartered in Singapore, Seagate offers its products through a vertically integrated supply chain that services customers globally.
Stock Performance Review
Over the past year, shares of the electronic storage manufacturer have lagged behind the broader market. While STX stock has increased 16.9%, the S&P 500 Index ($SPX) has rallied 22.3%. In contrast, STX has shown stronger performance year-to-date, rising by 17.6% compared to SPX’s nearly 4% increase.
Moreover, STX’s returns are slightly below the Technology Select Sector SPDR Fund’s (XLK) 17.1% return over the same period.
Q2 Earnings Show Strong Demand
Shares of Seagate Technology surged 6.8% following its Q2 earnings release on January 21, where the company posted an adjusted EPS of $2.03, exceeding estimates. The report highlighted a year-over-year revenue increase of 49.5%, reaching $2.3 billion, fueled by robust demand for nearline HDDs, whose revenue nearly doubled. This growth aligns with a 50% rise in cloud capital investments. Notably, gross margins improved to 35.5%, signaling effective cost management and boosting investor confidence in Seagate’s profitability and efficiency.
Analyst Outlook and Ratings
For the fiscal year ending in June 2025, analysts project a significant growth in STX’s EPS to $6.82. Seagate has consistently beaten consensus estimates over the last four quarters, enhancing its earnings surprise reputation.
Among the 20 analysts following the stock, the consensus rating stands at “Moderate Buy,” consisting of 12 “Strong Buy” ratings, one “Moderate Buy,” five “Holds,” and two “Strong Sells.” This outlook has improved compared to three months ago when there were only 10 “Strong Buy” ratings.
Price Targets and Future Potential
On February 10, Evercore ISI analyst Amit Daryanani retained a “Buy” rating for Seagate Technology, setting a price target of $135. Currently, STX trades below the average price target of $122.11. Interestingly, the highest price target of $160 suggests a potential upside of 57.7% from its present levels.
On the date of publication, Sohini Mondal did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. To read more, please see the Barchart Disclosure Policy here.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.
