SEAGATE TECHNOLOGY HOLDINGS (STX) Stock Fundamental Analysis
NASDAQ:STX - Nasdaq - IE00BKVD2N49 - Common Stock - Currency: USD
Overall STX gets a fundamental rating of 5 out of 10. We evaluated STX against 32 industry peers in the Technology Hardware, Storage & Peripherals industry. STX has a medium profitability rating, but doesn't score so well on its financial health evaluation. STX has a correct valuation and a medium growth rate. Finally STX also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year STX was profitable.
STX had a positive operating cash flow in the past year.
STX had positive earnings in 4 of the past 5 years.
In the past 5 years STX always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 19.75%, STX belongs to the top of the industry, outperforming 96.88% of the companies in the same industry.
STX has a better Return On Invested Capital (24.04%) than 87.50% of its industry peers.
STX had an Average Return On Invested Capital over the past 3 years of 11.70%. This is significantly below the industry average of 16.87%.
The last Return On Invested Capital (24.04%) for STX is above the 3 year average (11.70%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.75% | ||
| ROE | N/A | ||
| ROIC | 24.04% |
ROA(3y)5.25%
ROA(5y)8.43%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)11.7%
ROIC(5y)14.3%
1.3 Margins
Looking at the Profit Margin, with a value of 17.49%, STX belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
In the last couple of years the Profit Margin of STX has declined.
STX has a better Operating Margin (19.26%) than 87.50% of its industry peers.
In the last couple of years the Operating Margin of STX has declined.
STX's Gross Margin of 33.79% is in line compared to the rest of the industry. STX outperforms 56.25% of its industry peers.
STX's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.26% | ||
| PM (TTM) | 17.49% | ||
| GM | 33.79% |
OM growth 3Y-22.88%
OM growth 5Y-14.5%
PM growth 3Y-25.37%
PM growth 5Y-23.38%
GM growth 3Y-4.96%
GM growth 5Y-3.64%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so STX is creating value.
The number of shares outstanding for STX has been increased compared to 1 year ago.
STX has less shares outstanding than it did 5 years ago.
The debt/assets ratio for STX is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.07 indicates that STX is not a great score, but indicates only limited risk for bankruptcy at the moment.
STX's Altman-Z score of 2.07 is in line compared to the rest of the industry. STX outperforms 59.38% of its industry peers.
STX has a debt to FCF ratio of 6.66. This is a slightly negative value and a sign of low solvency as STX would need 6.66 years to pay back of all of its debts.
STX has a Debt to FCF ratio of 6.66. This is in the better half of the industry: STX outperforms 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.66 | ||
| Altman-Z | 2.07 |
ROIC/WACC2.96
WACC8.11%
2.3 Liquidity
STX has a Current Ratio of 1.36. This is a normal value and indicates that STX is financially healthy and should not expect problems in meeting its short term obligations.
STX's Current ratio of 1.36 is in line compared to the rest of the industry. STX outperforms 43.75% of its industry peers.
STX has a Quick Ratio of 1.36. This is a bad value and indicates that STX is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.75, STX is doing worse than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 0.75 |
3. Growth
3.1 Past
STX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13020.00%, which is quite impressive.
The earnings per share for STX have been decreasing by -23.23% on average. This is quite bad
Looking at the last year, STX shows a very strong growth in Revenue. The Revenue has grown by 36.29%.
STX shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -8.81% yearly.
EPS 1Y (TTM)13020%
EPS 3Y-39.22%
EPS 5Y-23.23%
EPS Q2Q%475.76%
Revenue 1Y (TTM)36.29%
Revenue growth 3Y-15.04%
Revenue growth 5Y-8.81%
Sales Q2Q%30.51%
3.2 Future
STX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 49.23% yearly.
The Revenue is expected to grow by 10.78% on average over the next years. This is quite good.
EPS Next Y524.6%
EPS Next 2Y172.58%
EPS Next 3Y100.85%
EPS Next 5Y49.23%
Revenue Next Year38.73%
Revenue Next 2Y24.72%
Revenue Next 3Y17.32%
Revenue Next 5Y10.78%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 16.31, which indicates a correct valuation of STX.
Based on the Price/Earnings ratio, STX is valued a bit cheaper than 65.63% of the companies in the same industry.
STX is valuated rather cheaply when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 11.25, the valuation of STX can be described as reasonable.
STX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. STX is cheaper than 62.50% of the companies in the same industry.
STX's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.31 | ||
| Fwd PE | 11.25 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of STX is on the same level as its industry peers.
STX's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.3 | ||
| EV/EBITDA | 14.45 |
4.3 Compensation for Growth
STX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of STX may justify a higher PE ratio.
STX's earnings are expected to grow with 100.85% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y172.58%
EPS Next 3Y100.85%
5. Dividend
5.1 Amount
STX has a Yearly Dividend Yield of 2.68%. Purely for dividend investing, there may be better candidates out there.
STX's Dividend Yield is rather good when compared to the industry average which is at 2.74. STX pays more dividend than 90.63% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, STX has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
5.2 History
The dividend of STX has a limited annual growth rate of 1.79%.
STX has been paying a dividend for at least 10 years, so it has a reliable track record.
STX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)1.79%
Div Incr Years1
Div Non Decr Years11
5.3 Sustainability
STX pays out 39.76% of its income as dividend. This is a sustainable payout ratio.
The dividend of STX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.76%
EPS Next 2Y172.58%
EPS Next 3Y100.85%
106.97
-2.07 (-1.9%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners92.34%
Inst Owner Change4%
Ins Owners0.38%
Ins Owner Change-0.36%
Market Cap22.65B
Analysts76.43
Price Target112.4 (5.08%)
Short Float %8.95%
Short Ratio4.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
Yearly Dividend2.8
Dividend Growth(5Y)1.79%
DP39.76%
Div Incr Years1
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.62%
Min EPS beat(2)7.19%
Max EPS beat(2)8.05%
EPS beat(4)4
Avg EPS beat(4)14.53%
Min EPS beat(4)5.16%
Max EPS beat(4)37.71%
EPS beat(8)7
Avg EPS beat(8)47.94%
EPS beat(12)8
Avg EPS beat(12)13.67%
EPS beat(16)11
Avg EPS beat(16)10.76%
Revenue beat(2)1
Avg Revenue beat(2)0.01%
Min Revenue beat(2)-0.68%
Max Revenue beat(2)0.7%
Revenue beat(4)2
Avg Revenue beat(4)0.14%
Min Revenue beat(4)-0.68%
Max Revenue beat(4)0.74%
Revenue beat(8)2
Avg Revenue beat(8)-1.66%
Revenue beat(12)3
Avg Revenue beat(12)-2.42%
Revenue beat(16)3
Avg Revenue beat(16)-1.95%
PT rev (1m)-7.59%
PT rev (3m)-10.02%
EPS NQ rev (1m)15.63%
EPS NQ rev (3m)15.1%
EPS NY rev (1m)6.74%
EPS NY rev (3m)6.33%
Revenue NQ rev (1m)4.32%
Revenue NQ rev (3m)4.19%
Revenue NY rev (1m)1.5%
Revenue NY rev (3m)1.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.31 | ||
| Fwd PE | 11.25 | ||
| P/S | 2.65 | ||
| P/FCF | 29.3 | ||
| P/OCF | 22.44 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.45 |
EPS(TTM)6.56
EY6.13%
EPS(NY)9.51
Fwd EY8.89%
FCF(TTM)3.65
FCFY3.41%
OCF(TTM)4.77
OCFY4.46%
SpS40.34
BVpS-3.92
TBVpS-9.67
PEG (NY)0.03
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.75% | ||
| ROE | N/A | ||
| ROCE | 31.93% | ||
| ROIC | 24.04% | ||
| ROICexc | 28.55% | ||
| ROICexgc | 39.7% | ||
| OM | 19.26% | ||
| PM (TTM) | 17.49% | ||
| GM | 33.79% | ||
| FCFM | 9.05% |
ROA(3y)5.25%
ROA(5y)8.43%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)11.7%
ROIC(5y)14.3%
ROICexc(3y)13.88%
ROICexc(5y)17.94%
ROICexgc(3y)19.58%
ROICexgc(5y)25.16%
ROCE(3y)15.55%
ROCE(5y)18.99%
ROICexcg growth 3Y-23.55%
ROICexcg growth 5Y-15.5%
ROICexc growth 3Y-26.97%
ROICexc growth 5Y-17.2%
OM growth 3Y-22.88%
OM growth 5Y-14.5%
PM growth 3Y-25.37%
PM growth 5Y-23.38%
GM growth 3Y-4.96%
GM growth 5Y-3.64%
F-Score7
Asset Turnover1.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.66 | ||
| Debt/EBITDA | 2.71 | ||
| Cap/Depr | 93.28% | ||
| Cap/Sales | 2.76% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 53.16% | ||
| Profit Quality | 51.74% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 0.75 | ||
| Altman-Z | 2.07 |
F-Score7
WACC8.11%
ROIC/WACC2.96
Cap/Depr(3y)80.76%
Cap/Depr(5y)104.42%
Cap/Sales(3y)3.81%
Cap/Sales(5y)4.33%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)13020%
EPS 3Y-39.22%
EPS 5Y-23.23%
EPS Q2Q%475.76%
EPS Next Y524.6%
EPS Next 2Y172.58%
EPS Next 3Y100.85%
EPS Next 5Y49.23%
Revenue 1Y (TTM)36.29%
Revenue growth 3Y-15.04%
Revenue growth 5Y-8.81%
Sales Q2Q%30.51%
Revenue Next Year38.73%
Revenue Next 2Y24.72%
Revenue Next 3Y17.32%
Revenue Next 5Y10.78%
EBIT growth 1Y1175.19%
EBIT growth 3Y-34.47%
EBIT growth 5Y-22.04%
EBIT Next Year263.57%
EBIT Next 3Y66.63%
EBIT Next 5Y32%
FCF growth 1Y36.33%
FCF growth 3Y-16.19%
FCF growth 5Y-10.54%
OCF growth 1Y11.49%
OCF growth 3Y-17.35%
OCF growth 5Y-12.22%