SEAGATE TECHNOLOGY HOLDINGS (STX) Stock Fundamental Analysis
NASDAQ:STX - Nasdaq - IE00BKVD2N49 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to STX. STX was compared to 32 industry peers in the Technology Hardware, Storage & Peripherals industry. There are concerns on the financial health of STX while its profitability can be described as average. STX has a decent growth rate and is not valued too expensively. 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.
Of the past 5 years STX 4 years were profitable.
Each year in the past 5 years STX had a positive operating cash flow.
1.2 Ratios
STX has a better Return On Assets (19.75%) than 96.88% of its industry peers.
With an excellent Return On Invested Capital value of 24.04%, STX belongs to the best of the industry, outperforming 90.63% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for STX is below the industry average of 16.14%.
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
The Profit Margin of STX (17.49%) is better than 90.63% of its industry peers.
In the last couple of years the Profit Margin of STX has declined.
The Operating Margin of STX (19.26%) is better than 87.50% of its industry peers.
STX's Operating Margin has declined in the last couple of years.
The Gross Margin of STX (33.79%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of STX has declined.
| 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.
STX has more shares outstanding than it did 1 year ago.
STX has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, STX has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.68 indicates that STX is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of STX (2.68) is better than 65.63% of its industry peers.
The Debt to FCF ratio of STX is 6.66, which is on the high side as it means it would take STX, 6.66 years of fcf income to pay off 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 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.66 | ||
| Altman-Z | 2.68 |
ROIC/WACC2.89
WACC8.33%
2.3 Liquidity
A Current Ratio of 1.36 indicates that STX should not have too much problems paying its short term obligations.
STX has a Current ratio (1.36) which is in line with 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.
STX has a Quick ratio of 0.75. This is in the lower half of the industry: STX underperforms 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 0.75 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 13020.00% over the past year.
Measured over the past years, STX shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -23.23% on average per year.
STX shows a strong growth in Revenue. In the last year, the Revenue has grown by 36.29%.
The Revenue has been decreasing by -8.81% on average over the past years.
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
Based on estimates for the next years, STX will show a very strong growth in Earnings Per Share. The EPS will grow by 47.14% on average per year.
The Revenue is expected to grow by 11.49% on average over the next years. This is quite good.
EPS Next Y525.84%
EPS Next 2Y177.28%
EPS Next 3Y109.29%
EPS Next 5Y47.14%
Revenue Next Year38.73%
Revenue Next 2Y24.9%
Revenue Next 3Y18.38%
Revenue Next 5Y11.49%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 22.71, the valuation of STX can be described as rather expensive.
STX's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of STX to the average of the S&P500 Index (27.51), we can say STX is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 15.14, the valuation of STX can be described as correct.
The rest of the industry has a similar Price/Forward Earnings ratio as STX.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.58, STX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.71 | ||
| Fwd PE | 15.14 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as STX.
The rest of the industry has a similar Price/Free Cash Flow ratio as STX.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.9 | ||
| EV/EBITDA | 18.95 |
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.
A more expensive valuation may be justified as STX's earnings are expected to grow with 109.29% in the coming years.
PEG (NY)0.04
PEG (5Y)N/A
EPS Next 2Y177.28%
EPS Next 3Y109.29%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.99%, STX has a reasonable but not impressive dividend return.
STX's Dividend Yield is rather good when compared to the industry average which is at 1.95. STX pays more dividend than 90.63% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, STX has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)1.79%
Div Incr Years1
Div Non Decr Years11
5.3 Sustainability
39.76% of the earnings are spent on dividend by STX. This is a low number and sustainable payout ratio.
The dividend of STX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP39.76%
EPS Next 2Y177.28%
EPS Next 3Y109.29%
148.99
-0.09 (-0.06%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners95.55%
Inst Owner Change0%
Ins Owners0.35%
Ins Owner Change-1.04%
Market Cap31.62B
Analysts76.43
Price Target122.69 (-17.65%)
Short Float %8.74%
Short Ratio4.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
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)1.11%
PT rev (3m)0.87%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)16.16%
EPS NY rev (1m)0.2%
EPS NY rev (3m)6.39%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)4.32%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.71 | ||
| Fwd PE | 15.14 | ||
| P/S | 3.7 | ||
| P/FCF | 40.9 | ||
| P/OCF | 31.34 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.95 |
EPS(TTM)6.56
EY4.4%
EPS(NY)9.84
Fwd EY6.61%
FCF(TTM)3.64
FCFY2.44%
OCF(TTM)4.75
OCFY3.19%
SpS40.24
BVpS-3.91
TBVpS-9.65
PEG (NY)0.04
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 | 2.68 |
F-Score7
WACC8.33%
ROIC/WACC2.89
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 Y525.84%
EPS Next 2Y177.28%
EPS Next 3Y109.29%
EPS Next 5Y47.14%
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 2Y24.9%
Revenue Next 3Y18.38%
Revenue Next 5Y11.49%
EBIT growth 1Y1175.19%
EBIT growth 3Y-34.47%
EBIT growth 5Y-22.04%
EBIT Next Year279.16%
EBIT Next 3Y70.27%
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%