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Seagate Technology Holdings PLC STX

Morningstar Rating
$95.82 −0.79 (0.82%)
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Company Report

Seagate Benefits From Cloud and Data Center Spending, but Remains Vulnerable to Cyclicality

Seagate is a leading designer and manufacturer of hard disk drives, or HDDs, used for data storage in consumer and enterprise applications. We think Seagate is successfully transitioning its portfolio to focus on mass-capacity drives for cloud providers and enterprises as consumer applications for legacy HDDs switch to faster flash-based solid-state drives. We expect continued demand for mass-capacity drives over the next five years as enterprises look to capture more data and use a multitier storage approach, implementing both mass-capacity HDDs and smaller enterprise-grade SSDs as complements in data centers. Seagate has consistently driven costs down for its mass-capacity HDDs by advancing to larger capacities, and we think it will continue to do so by leveraging new technologies like heat-assisted magnetic recording.

Price vs Fair Value

STX is trading at a 27% premium.
Price
$96.60
Fair Value
$41.00
Uncertainty
High
1-Star Price
$214.27
5-Star Price
$96.40
Economic Moat
Hkdb
Capital Allocation
Drbkqkr

Bulls Say, Bears Say

Bulls

We think strong demand for Seagate’s nearline drives will power mid-single-digit top-line growth in the short term as enterprises look to store the growing amount of data they generate.

Bears

We think the HDD market is commoditylike and cyclical, leaving Seagate vulnerable to market pricing declines that can shrink the top line and sink margins.

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News

Trading Information

Previous Close Price
$96.61
Day Range
$94.7496.51
52-Week Range
$57.07101.15
Bid/Ask
$95.74 / $95.83
Market Cap
$20.12 Bil
Volume/Avg
748,977 / 2.9 Mil

Key Statistics

Price/Earnings (Normalized)
1,932.00
Price/Sales
3.21
Dividend Yield (Trailing)
2.90%
Dividend Yield (Forward)
2.90%
Total Yield
2.90%

Company Profile

Seagate is a leading supplier of hard disk drives for data storage to the enterprise and consumer markets. It forms a practical duopoly in the market with its chief rival, Western Digital; they are both vertically integrated.
Sector
Technology
Industry
Computer Hardware
Stock Style Box
Large Value
Total Number of Employees
33,400

Competitors

Valuation

Metric
STX
000660
WDC
Price/Earnings (Normalized)
1,932.00
Price/Book Value
2.402.48
Price/Sales
3.213.322.08
Price/Cash Flow
335.6813.68
Price/Earnings
STX
000660
WDC

Financial Strength

Metric
STX
000660
WDC
Quick Ratio
0.410.85
Current Ratio
0.851.411.67
Interest Coverage
0.43−7.09−4.97
Quick Ratio
STX
000660
WDC

Profitability

Metric
STX
000660
WDC
Return on Assets (Normalized)
0.18%−4.08%−4.85%
Return on Equity (Normalized)
−7.40%−11.20%
Return on Invested Capital (Normalized)
6.91%−3.51%−4.70%
Return on Assets
STX
000660
WDC
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