Analyst Note| Mark Cash |
No-moat Dell Technologies' 3% year-over-year revenue growth and adjusted EPS of $2.03 solidly exceeded CapIQ consensus estimates for the third fiscal quarter. Benefiting Dell in the quarter, notebook computers are in high demand as employees and students shelter in place during the pandemic. Dell had record shipments, revenue, and profitability for its computer division, helping make up for weakness experienced within the server and storage business unit. While the pandemic may only be a temporary gusty tailwind for computer demand, we believe Dell's hybrid-cloud offerings can provide it with a sustainable presence in the IT infrastructure stack for customers. We are maintaining our $65 fair value estimate and see shares as fairly valued.