Is It Time To Consider Buying Seagate Technology Holdings plc (NASDAQ:STX)?

Let's talk about the popular Seagate Technology Holdings plc (NASDAQ:STX). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Seagate Technology Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Seagate Technology Holdings

What's the opportunity in Seagate Technology Holdings?

Great news for investors – Seagate Technology Holdings is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $108.66, but it is currently trading at US$84.50 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Seagate Technology Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Seagate Technology Holdings?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 42% over the next couple of years, the future seems bright for Seagate Technology Holdings. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since STX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on STX for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy STX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing Seagate Technology Holdings at this point in time. For example, we've discovered 3 warning signs that you should run your eye over to get a better picture of Seagate Technology Holdings.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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