Dell's Expanding Security Portfolio to Aid 2023 Prospects?
Dell Technologies DELL is experiencing a tough 2023 due to a challenging macroeconomic environment and a slump in the PC market. Shares have declined 27.8% in the past year compared with the Zacks Computer & Technology sector’s drop of 15.3%.
However, the PC-maker’s expanding portfolio including security holds promise for its prospect this year.
Dell’s latest security services and solutions will help enterprises protect against threats, respond to attacks, and secure their devices, systems and clouds. It is expanding the capabilities of Managed Detection and Response solutions with the latest Pro Plus, which is a fully managed security operations solution that helps organizations prevent, respond and recover from security threats.
Moreover, Dell is now offering more choices to its customers with CrowdStrike Falcon in its SafeGuard and Response portfolio. It is also launching Product Success Accelerator for Cyber Recovery, a new service that helps enterprises protect critical data and maintain business continuity.
For its commercial PC offerings, Dell is launching a cloud-based version of its Secured Component Verification offering, which helps in reducing the risk of product tampering. The solution will be available in May, this year.
Dell Technologies Inc. Price, Consensus and EPS Surprise
Dell Technologies Inc. price-consensus-eps-surprise-chart | Dell Technologies Inc. Quote
Slump in PC Market Hurts Dell
Dell has underperformed its PC market peers, including Apple AAPL, HP HPQ and Lenovo LNVGY in the past year. Apple, HP, and Lenovo shares have declined 4.1%, 21.9% and 8.5%, respectively.
The slump in the PC market has been detrimental to Dell. In the fiscal fourth quarter, Client Solutions Group revenues declined 23% year over year to $13.4 billion, primarily due to continued softness in both commercial and consumer PC markets. Commercial revenues were $10.7 billion, down 17%, and consumer revenues were $2.7 billion, down 40%.
Per Gartner, worldwide PC shipments in the fourth quarter of 2022 witnessed a year-over-year decrease of 28.5%, reaching 65.292 million units. Dell was ranked third among all PC vendors, trailing Lenovo and HP, but beating Apple.
This Zacks Rank #5 (Strong Sell) company shipped 10.884 million units, witnessing a 37% year-over-year decline in the fourth quarter of 2022, per the Gartner report. Lenovo, HP and Apple shipped 15.663 million, 13.216 million and 7.011 million units, respectively.
Dell now expects first-quarter fiscal 2024 revenues to be seasonally lower than average, down sequentially between 17% and 21%. It expects unfavorable forex of roughly 300 basis points to fiscal first-quarter revenues. For fiscal 2024, Dell expects revenues to decline between 12% and 18%.
The Zacks Consensus Estimate for the fiscal first quarter is pegged at 87 cents per share, down 34.6% over the past 30 days. For fiscal 2024, the consensus mark for earnings stands at $5.33 per share, down 13.1% over the same timeframe.
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