tiprankstipranks
Dell Technologies Is Poised for Growth
Stock Analysis & Ideas

Dell Technologies Is Poised for Growth

Dell Technologies (DELL) shares are positioned to add to their gains of 36% over the past year.

Thus, I am bullish on this stock.

Headquartered in Round Rock, Texas, Dell Technologies is a leading global developer and provider of information technology solutions and various products and services.

The company provides servers and equipment for enterprise data centers through its Infrastructure Solutions Group (ISG) segment.

The Client Solutions Group (CSG) segment offers personal computers for businesses and consumers.

The VMware segment supports and addresses various customer IT priorities, including software development and IT operations. This segment also provides information security solutions such as cloud software and infrastructure-as-a-service solutions.

Q4 2022 Results

For the fourth quarter of fiscal 2022, Dell Technologies had a pro forma income of $1.72 per share on total revenue of $28 billion, up 16% year-over-year.

Pro forma earnings per share missed the median consensus estimate by $0.23, while revenue beat the analysts’ median forecast by $480 million.

Year-over-year, CSG’s revenue of $17.3 billion represented a growth of more than 25%. ISG revenue was $9.2 billion (its fourth straight quarter of growth), up 3%.

In addition, beginning April 29, the company will pay a quarterly cash dividend of $0.33 per share. Shareholders must be on the company’s files no later than April 20 if they wish to benefit from the distribution.

Financial Condition

The balance sheet appears moderately solid. The interest coverage ratio of 7.6 suggests the company’s ability to pay interest on its total debt of $27 billion is good.

The company has cash and equivalents totaling $9.5 billion, but its current ratio of 0.8 suggests it’s struggling to meet near-term commitments.

Outlook

According to technology market analysis firm Canalys, the demand for PCs is expected to remain strong in 2022 and beyond, driven by digital acceleration.

As the Internet expands and infrastructure modernization enables faster data exchange per unit of time, consumers and businesses need increasingly powerful and stable devices to make the most out of their activities.

U.S. PC shipments are expected to decline. However, this will be fully offset by demand in EMEA and Asia-Pacific, giving the industry a positive boost in 2022 and beyond.

Dell is one of the leading players in the global PC industry as it holds a 17% market share, and is the third best-selling brand in the world.

Wall Street’s Take

Over the past three months, four Wall Street analysts have issued a 12-month price target for DELL. Three Buys and one Hold add up to a Strong Buy consensus rating.

The average Dell Technologies price target is $69.50, which suggests an upside potential of 33.2%.

Conclusion

The shares have performed very well over the past year, outperforming most tech stocks. Dell should maintain this trend in 2022, as the positive momentum for the global PC industry is expected to continue.

Download the TipRanks mobile app now

​To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Read full Disclaimer & Disclosure

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles