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Dell Technologies Inc Ordinary Shares - Class C DELL

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Stock XNYS Rating as of
$120.22 −6.27 (4.96%)
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As of Delayed Price Closed

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Dell Earnings: Sky-High AI Sales Drive Revenue Beat; Raising Our Fair Value Estimate

Eric Compton,

No-moat Dell Technologies reported robust fiscal second-quarter earnings, with AI-server sales dramatically exceeding our expectations, $3.1 billion versus $2.4 billion expected. The firm continues to ride the AI wave and exceeded our revenue expectations by 5%, driven by AI server sales. We were also impressed with the firm’s improving margin profile, as Dell seems to be winning business while also maintaining better margins than peers. We have lifted our revenue and profitability estimates to reflect our more optimistic outlook given current results. As a result, we are raising our fair value estimate to $112 from $92. Shares rose 4% during after-hours trading (likely driven by the AI server-driven top-line guidance beat) and screen as fairly valued compared with our raised valuation.

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Price vs Fair Value

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DELL is trading at a 859% premium.
Price
$120.22
Fair Value
$162.00
Uncertainty
High
1-Star Price
$596.10
5-Star Price
$42.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The AI server growth wave is just starting, and Dell will be a key beneficiary as inference workloads for enterprises begin to take off, creating material revenue growth.

Bears

The AI server market’s current growth may not be maintainable, and most of this growth will be concentrated with the hyperscalers. OEMs like Dell will only see low margins in this business.

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News

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Trading Information

Previous Close Price
$126.49
Day Range
$120.07–124.41
52-Week Range
$63.90–179.70
Bid/Ask
$120.05 / $120.16
Market Cap
$84.39 Bil
Volume/Avg
13.5 Mil / 12.2 Mil

Key Statistics

Price/Earnings (Normalized)
16.60
Price/Sales
0.96
Dividend Yield (Trailing)
1.36%
Dividend Yield (Forward)
1.48%
Total Yield
5.61%

Company Profile

Dell Technologies is a broad information technology vendor, primarily supplying hardware to enterprises. It is focused on premium and commercial personal computers and enterprise on-premises data center hardware. It holds top-three market shares in its core markets of personal computers, peripheral displays, mainstream servers, and external storage. Dell 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
120,000
Website
https://www.delltechnologies.com

Competitors

Valuation

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Metric
DELL
HPE
HPQ
Price/Earnings (Normalized)
 16.6010.4910.54
Price/Book Value
 —1.18—
Price/Sales
 0.960.920.66
Price/Cash Flow
 10.475.058.37
Price/Earnings
DELL
HPE
HPQ

Financial Strength

Metric
DELL
HPE
HPQ
Quick Ratio
 0.400.470.37
Current Ratio
 0.720.940.71
Interest Coverage
 3.5111.588.08
Quick Ratio
DELL
HPE
HPQ

Profitability

Metric
DELL
HPE
HPQ
Return on Assets (Normalized)
 6.39%4.34%11.41%
Return on Equity (Normalized)
 —11.87%—
Return on Invested Capital (Normalized)
 27.44%7.99%49.19%
Return on Assets
DELL
HPE
HPQ

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