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Dell Technologies Inc Ordinary Shares - Class C DELL

Morningstar Rating
$124.59 +29.93 (31.62%)
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Company Report

Dell Earnings: AI Growth Leads Our Valuation Higher, but Nowhere Near Its High-Flying Share Price

We raise our fair value estimate for no-moat Dell Technologies to $55 per share, from $46, behind higher growth expectations for the firm’s artificial intelligence server sales. Dell has carved out a good position with GPU-powered enterprise servers that should fit into relatively smaller data centers and appears to have a good relationship with Nvidia to supply the chips needed. Dell’s AI growth is impressive, but continues to represent a small minority of the business. Dell’s primary businesses remain the PC and traditional server markets, which exhibit lower growth. Due to the results, fiscal year guidance, an increased dividend, and AI-related momentum, Dell’s stock rose over 15% afterhours. Even with our raised outlook and a bullish view of AI server growth, we can't rationalize the current valuation and view shares as significantly overvalued.

Price vs Fair Value

DELL is trading at a 127% premium.
Price
$124.59
Fair Value
$33.00
Uncertainty
High
1-Star Price
$26.75
5-Star Price
$58.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Dell is an enterprise IT hardware behemoth, with top three market shares across personal computers, peripheral displays, x86 servers, and external storage arrays.

Bears

Dell’s core businesses compete in commoditized and cyclical markets that erode economic profits.

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News

Trading Information

Previous Close Price
$94.66
Day Range
$116.45131.06
52-Week Range
$35.96131.06
Bid/Ask
$124.23 / $124.24
Market Cap
$88.00 Bil
Volume/Avg
62.2 Mil / 5.8 Mil

Key Statistics

Price/Earnings (Normalized)
18.51
Price/Sales
1.04
Dividend Yield (Trailing)
1.19%
Dividend Yield (Forward)
1.43%
Total Yield
3.96%

Company Profile

Dell Technologies is a broad information technology vendor, primarily supplying hardware to enterprises. It is focused on premium personal computers and enterprise on-premises data center hardware. It holds top-three shares in its core markets of personal computers, peripheral displays, mainstream servers, and external storage. Dell is vertically integrated but has a robust ecosystem of component and assembly partners, and also relies heavily on channel partners to fulfill its sales.
Sector
Technology
Industry
Computer Hardware
Stock Style Box
Large Value
Total Number of Employees
133,000

Competitors

Valuation

Metric
DELL
HPQ
00992
Price/Earnings (Normalized)
18.518.7313.03
Price/Book Value
2.27
Price/Sales
1.040.550.27
Price/Cash Flow
10.607.087.24
Price/Earnings
DELL
HPQ
00992

Financial Strength

Metric
DELL
HPQ
00992
Quick Ratio
0.470.350.58
Current Ratio
0.760.710.87
Interest Coverage
3.157.103.46
Quick Ratio
DELL
HPQ
00992

Profitability

Metric
DELL
HPQ
00992
Return on Assets (Normalized)
5.80%9.25%3.00%
Return on Equity (Normalized)
19.65%
Return on Invested Capital (Normalized)
23.06%41.54%13.57%
Return on Assets
DELL
HPQ
00992
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