Shares of Chinese PC and electronics juggernaut Lenovo Group (OTC:LNVGY) (HK:0992) are in focus today after the company delivered bumper fourth-quarter results.
Lenovo’s AI-Powered Q4
In Q4, Lenovo’s top line increased by 9.4% year-over-year to $13.83 billion, comfortably outpacing expectations by $660 million. Importantly, its EPS more than doubled over the prior year to $0.40. This robust performance comes amid strong AI-fueled demand and promising business momentum for the company. In recent times, Lenovo has introduced a wave of AI PCs as well as other AI-powered smart devices.
During the quarter, revenue from Lenovo’s Solutions and Services Group (SSG) vertical rose by 10% to $1.8 billion. This growth was accompanied by a healthy operating margin of over 21%. Furthermore, revenue in the company’s Infrastructure Solutions Group (ISG) increased by 15%. This segment could continue to outperform on the back of soaring demand for AI servers.
What’s more, the company’s PC business remained in pole position in four out of its five geographies, clocking record market share in North America. Notably, Lenovo is also working towards expanding AI from PCs to phones and tablets. The company expects PC market volumes to rise back to pre-COVID-19 levels over the coming periods. Buoyed by this momentum, Lenovo has declared a dividend of HK$0.30 per share.
Is Lenovo Stock a Buy, Sell, or a Hold?
Lenovo’s share price has rallied by nearly 52% over the past year. Analysts have assigned the company’s Hong Kong-listed shares a Strong Buy rating, alongside an average Lenovo price target of HK$10.54. However, analysts’ views on the stock could see a revision following today’s earnings report.
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