Yahoo Finance Results: Seagate Technology plc Exceeded Expectations And The Consensus Has Updated Its Estimates
Seagate Technology plc (NASDAQ:STX) investors will be delighted, with the company turning in some strong numbers with its latest results. Seagate Technology beat earnings, with revenues hitting US$2.6b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Seagate Technology
After the latest results, the 26 analysts covering Seagate Technology are now predicting revenues of US$10.4b in 2021. If met, this would reflect a reasonable 2.3% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to climb 15% to US$4.42. In the lead-up to this report, the analysts had been modelling revenues of US$10.3b and earnings per share (EPS) of US$4.30 in 2021. So the consensus seems to have become somewhat more optimistic on Seagate Technology's earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 9.2% to US$63.63. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Seagate Technology, with the most bullish analyst valuing it at US$79.00 and the most bearish at US$40.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Seagate Technology's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Seagate Technology is forecast to grow faster in the future than it has in the past, with revenues expected to grow 2.3%. If achieved, this would be a much better result than the 2.4% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 7.3% next year. So although Seagate Technology's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Seagate Technology following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Seagate Technology's revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Seagate Technology analysts - going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Seagate Technology that we have uncovered.
This article by Simply Wall St is general in nature. 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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