Is Seagate Stock Set for More Growth After Surging 83% in 2025?

Thinking about what to do with your Seagate Technology Holdings shares? Or maybe you are on the fence about starting a position. Either way, if you have been tracking this stock recently, you have seen a ride that few in tech hardware can match. The shares have notched an 83.4% gain year-to-date and soared 45.5% over the last three months alone. Even over the past year, the stock is up 55.9%. That is a remarkable run for any company, especially for one in the storage business, a sector not always known for explosive growth.

So, what is driving these impressive returns? Investor sentiment is shifting as Seagate delivers stronger revenue and net income growth, and many see the industry’s risk profile improving with AI and data center expansion. It helps that the latest close of $158.40 is not far below target prices, but most interesting is the discount to the company’s intrinsic value, at around 28.5%. That is catching the eye of value-minded investors who want growth and a margin of safety.

Of course, valuation always matters. On a commonly used 6-factor undervaluation score, Seagate checks 4 boxes, landing at an above-average valuation score of 4. This means it looks undervalued by several metrics, but not all.

I am going to walk you through those valuation approaches next. Then I will share what I believe is the smarter, more insightful way to judge whether Seagate is truly worth its price tag.

Seagate Technology Holdings delivered 55.9% returns over the last year. See how this stacks up to the rest of the Tech industry.

Approach 1: Seagate Technology Holdings Cash Flows

The Discounted Cash Flow (DCF) model is a cornerstone of valuation, projecting the company’s future free cash flows and then discounting those amounts to determine what they're worth today. This gives investors a data-driven look at a company’s true or “intrinsic” value.

For Seagate Technology Holdings, the latest twelve months’ free cash flow stands at $753 million. Looking ahead, analysts expect a rapid climb, with projected free cash flow reaching $2.7 billion by 2030. This anticipated growth is fueled by continued AI adoption and greater demand for data storage, factors that are feeding optimism into these long-term forecasts.

Based on these projections, the DCF model pegs Seagate’s intrinsic share value at $221.67, using a 2-Stage Free Cash Flow to Equity approach. With the shares most recently trading at $158.40, the math implies the stock is about 28.5% undervalued by this measure.

When comparing calculated value to the current price, the discount is large enough to raise eyebrows, suggesting room for more upside and that the current market may be underappreciating Seagate’s future cash generation potential.

Result: UNDERVALUED

Our DCF analysis suggests Seagate Technology Holdings is undervalued by 28.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Seagate Technology Holdings Price vs Earnings

The price-to-earnings (PE) ratio is one of the most popular valuation tools for profitable companies, such as Seagate Technology Holdings, because it quickly tells investors how much they are paying for each dollar of net earnings. The PE ratio is especially useful when a company is solidly profitable and able to drive stable earnings growth over time.

Growth expectations and risk play a big part in determining what makes a “normal” or “fair” PE ratio. Companies with strong earnings prospects or less risk often justify higher PE multiples, while more volatile or low-growth names typically warrant less investor enthusiasm.

Currently, Seagate trades at a PE of 22.9x. This is slightly below the broader tech industry average of 24.0x and remains a bit above the closest peer group at 16.2x. Simply Wall St’s “Fair Ratio,” which takes into account Seagate’s growth outlook, profitability, market size, and risk profile, calculates a fair PE of 28.2x for these shares.

Comparing Seagate’s current multiple to this Fair Ratio suggests that the stock may be undervalued by this approach, since the share price does not fully reflect the company’s risk-adjusted earnings power and future potential.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Seagate Technology Holdings Narrative

Beyond the traditional metrics, a Narrative is your personal story or viewpoint about a company. It connects your outlook on its industry drivers, growth prospects, and risks to specific forecasts for its future revenue, margins, and fair value.

Narratives turn investment decisions from just a numbers game into a meaningful process. They link your beliefs about a company’s future to concrete financial estimates and, ultimately, to a fair value for the stock.

On Simply Wall St, Narratives are refreshingly easy to create and adjust. They empower millions of investors to explain not just what they think a stock is worth, but why, all in one accessible tool.

When you compare your Narrative’s Fair Value to the latest share price, you gain clarity on whether it is time to buy, hold, or sell. You can see at a glance how changes in news or earnings instantly update these assumptions.

For example, one investor might build a bullish Narrative for Seagate based on rapid AI data growth, supporting a price target of $200. Another could focus on debt risks and project fair value closer to $80, showing how personal perspectives make investing smarter and more dynamic.

Do you think there's more to the story for Seagate Technology Holdings? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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