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STX

Seagate Technology Holdings NasdaqGS:STX Stock Report

Last Price

US$79.24

Market Cap

US$16.5b

7D

-1.4%

1Y

-11.0%

Updated

17 Aug, 2022

Data

Company Financials +
STX fundamental analysis
Snowflake Score
Valuation4/6
Future Growth1/6
Past Performance4/6
Financial Health3/6
Dividends5/6

STX Stock Overview

Seagate Technology Holdings plc provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally.

Seagate Technology Holdings plc Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Seagate Technology Holdings
Historical stock prices
Current Share PriceUS$79.24
52 Week HighUS$117.67
52 Week LowUS$67.36
Beta1.09
1 Month Change2.23%
3 Month Change-3.96%
1 Year Change-11.00%
3 Year Change67.74%
5 Year Change155.53%
Change since IPO589.04%

Recent News & Updates

Aug 09

Seagate: Outperforming Western Digital On Major Fronts

Seagate has outperformed Western Digital in the All-Important Data Center HDD segment. Seagate’s next-generation HDD will go into production at least a full year ahead of Western Digital. More than 90% of exabytes in cloud data centers are stored on HDDs, and the remaining 10% are stored on SSDs. Seagate Technology (STX) tumbled 10% on July 21, 2022 after the hard-disk drive maker posted fourth quarter results that missed estimates and gave weak guidance. Seagate's chief executive officer Dave Mosley said the continuation of macro issues is continuing and the company is reducing production to maintain "supply discipline." The company is also managing expenses, Mosley added. STX and other data storage/memory companies have been beaten down in the past month. It started after the company's June 30, 2022 earnings call, when Micron (MU) shares were battered on weak guidance. To make matters worse, in a stroke of genius, on August 9, 2022, MU issued a follow-up warning that: "Our expectations for CY22 industry bit demand growth for DRAM and NAND have declined since our June 30, 2022 earnings call, and we expect a challenging market environment in FQ4 22 and FQ1 23." Following MU's June 30 earnings call, I detailed three miscues that the company made during the call in a July 18, 2022 Seeking Alpha article entitled "Post-Micron Earnings Call: What Samsung's Pre-Announcement Tells Us." I noted: "Mistake #2 - Micron's Q3 Guidance for Q4 was $7.2 billion +/- $400 million. But the Street Q4 Consensus was $9.2 billion. MU stock was pummeled after the earnings call because of the weak guidance, and it impacted numerous other semiconductor stocks. That raises a question - why wasn't the Street Q4 consensus at $9.2 billion lowered before the call when there was talk since March 30 about slowing PC and smartphone sales by none other than renowned TSMC Chairman Liu." I doubt if Micron read this article, but this guidance of August 9 is exactly what I wrote they should have done before the June 30 earnings. As a result, MU dropped more than 4% on the guidance and STX more than 5%. A Catalyst for Seagate Amid Macroeconomic Headwinds The headwinds facing Seagate, data storage competitor Western Digital (WDC) and other related companies in the past five weeks have been primarily macroeconomic, with inflation and recessionary fears the cause. As a result, it has currently impacted the consumer electronics sector, primarily PCs and smartphones using memory storage. When consumers weigh a new smartphone purchase versus $5 gasoline or 9.1% inflation, the highest in 40 years, they don't buy a smartphone. What these poor guidance numbers don't say is that consumers, whose spending contributes almost 70% of the total US economic output, will continue to use the consumer items they have, although not buying upgrades nor discontinuing using them. Of the remainder of economic output, 18% was from business investment and 17% government spending, which is obviously increasing. As the demand for data increases, the data center has not been impacted by the slowdown in consumer products. As cloud computing steadily increases in importance throughout the economy, data center upgrades are ramping up to keep pace. As an example, NVIDIA (NVDA) said its gaming business (a consumer product) revenue fell 44% sequentially and 33% year-over-year to $2.04 billion but its data center revenue rose 1% sequentially and 61% year-over-year to $3.81 billion. Advanced Micro Devices' (AMD) data center sales were up 83% to $1.49 billion, driven once again by AMD's EPYC processors for servers. In Q2, US hyperscaler public cloud sales increased on average 6.8% QoQ and 35.8% YoY. Azure (Microsoft (MSFT) increased 40% YoY, AWS Amazon (AMZN) increased 33.3%, and Google Cloud (GOOGL) increased 35.6%. The Hard Disk Drive Data Storage Business Hard Disk Drives (HDDs) compete against SSDs (solid state devices) based on NAND memory. HDDs for PCs have been replaced by SDDs, particularly for notebooks because unlike HDDs with a spinning disk, SDDs are more immune to damage because they have no moving parts. In other words, there are few if any notebooks that contain an HDD, and that has been the norm for many years HDDs for Consumer applications have dropped at nearly the same rate. These include gaming and external drives. HDDs and SSDs both work well for gaming, but HDDs do not do as well as SDDs for gaming because of longer load times. The real growth in HDDs is in the data center, as shown in Chart 1, for WDC and STX, where HDDs are a mainstay for inexpensive, reliable bulk storage. Nearline HDDs are utilized by nearly all enterprise market segments, including servers, network or external storage and hyperscale or cloud service providers. The Information Network Chart 1 Over the period C4Q 2018 to C1Q 2022, STX has been outperforming WDC in the strong Nearline subsegment as well as the non-nearline subsegment (client and consumer). HDDs vs SSDs Chart 2 shows HDD and SSD ASPs, which I forecast on a yearly basis to 2025, according to The Information Network's report, entitled "The Hard Disk Drive ("HDD") and Solid State Drive ("SSD") Industries: Market Analysis And Processing Trends." The Information Network Chart 2 Chart 3 shows ASPs for HDDs and SSDs per gigabyte ("GB") of data for HDD companies STX, Western Digital (WDC), and Toshiba. SSDs are more expensive than hard drives in terms of dollar per gigabyte. But SSD prices have been dropping significantly. In 2015 the SSD/HDD ASP ratio was 10X, dropping to 6X in 2021. The Information Network Chart 3 HDDs currently dominate the cloud exabyte market-offering the lowest cost per gigabyte based on a combination of factors including price, cost, capacity, power, performance, reliability, and data retention. HDDs represent the predominant storage for cloud data centers because they provide the best TCO (total cost of ownership) for the vast majority of cloud workloads. SSDs, with their performance and latency metrics, provide an appropriate value proposition for performance-sensitive, highly transactional workloads closer to compute nodes. Chart 4 shows market share for 2021 for HDD suppliers based on Exabytes of data. WDC and STX are statistically equal, but STX is stronger in the nearline subsegment with a 45% share (not shown). The Information Network Chart 4 Revolutionary New Technology for Seagate Looking ahead, HDDs are expected to maintain market share, thanks in part to advances that continue to increase capacities while maintaining performance. I forecast that HDDs are well-positioned to dominate data centers for the next 10 years. HDD capacity continues to increase, with 18TB drives now widely available. Increased capacity is driving down the cost per terabyte. Moreover, Seagate's new HAMR (heat assisted magnetic recording technology) drives were rolled out in 2020, with an initial capacity of 20TB and are forecasted to increase to 50TB by 2026. Higher capacity HDDs change the dynamics of data center storage.

Shareholder Returns

STXUS TechUS Market
7D-1.4%3.1%1.1%
1Y-11.0%18.3%-9.0%

Return vs Industry: STX underperformed the US Tech industry which returned 14.4% over the past year.

Return vs Market: STX underperformed the US Market which returned -8.9% over the past year.

Price Volatility

Is STX's price volatile compared to industry and market?
STX volatility
STX Average Weekly Movement5.9%
Tech Industry Average Movement7.8%
Market Average Movement7.6%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.1%

Stable Share Price: STX is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: STX's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
197840,000Dave Mosleyhttps://www.seagate.com

Seagate Technology Holdings plc provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally. It provides mass capacity storage products, including enterprise nearline hard disk drives (HDDs), enterprise nearline solid state drives (SSDs), enterprise nearline systems, video and image HDDs, and network-attached storage drives. The company also offers legacy applications comprising Mission Critical HDDs and SSDs; external storage solutions under the Seagate Ultra Touch, One Touch, and Expansion product lines, as well as under the LaCie brand name; desktop drives; notebook drives, DVR HDDs, and gaming SSDs.

Seagate Technology Holdings plc Fundamentals Summary

How do Seagate Technology Holdings's earnings and revenue compare to its market cap?
STX fundamental statistics
Market CapUS$16.54b
Earnings (TTM)US$1.65b
Revenue (TTM)US$11.66b

10.0x

P/E Ratio

1.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
STX income statement (TTM)
RevenueUS$11.66b
Cost of RevenueUS$8.19b
Gross ProfitUS$3.47b
Other ExpensesUS$1.82b
EarningsUS$1.65b

Last Reported Earnings

Jul 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)7.90
Gross Margin29.75%
Net Profit Margin14.14%
Debt/Equity Ratio5,179.8%

How did STX perform over the long term?

See historical performance and comparison

Dividends

3.5%

Current Dividend Yield

37%

Payout Ratio

Does STX pay a reliable dividends?

See STX dividend history and benchmarks
When do you need to buy STX by to receive an upcoming dividend?
Seagate Technology Holdings dividend dates
Ex Dividend DateSep 20 2022
Dividend Pay DateOct 05 2022
Days until Ex dividend33 days
Days until Dividend pay date48 days

Does STX pay a reliable dividends?

See STX dividend history and benchmarks