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Dell Technologies Inc Class C DELL

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Morningstar’s Analysis

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Robust Computer Demand for Dell More Than Offsets Weaker Servers and Storage; Maintain $65 FVE

Mark Cash Senior Equity Analyst

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.

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Company Profile

Business Description

Dell Technologies, born from Dell's 2016 acquisition of EMC, is a leading provider of servers and storage products through its ISG segment; PCs, monitors, and peripherals via its CSG division; and virtualization software through VMware. Its brands include Dell, Dell EMC, VMware, Boomi, Secureworks, and Virtustream. The company focuses on supplementing its traditional mainstream servers and PCs with hardware and software products for hybrid-cloud environments. The Texas-based company employs around 145,000 people and sells into 180 countries.

One Dell Way
Round Rock, TX, 78682
T +1 800 289-3355
Sector Technology
Industry Computer Hardware
Most Recent Earnings Oct 31, 2020
Fiscal Year End Jan 31, 2021
Stock Type Cyclical
Employees 165,000