SuperworthDell Technologies Inc. DELL
- Market cap
- $365.4B
- PE
- 33.6×
- 10y median 19.8×
- Forward PE
- Price to sales
- 2.4×
- EV/EBIT
- 27.4×
- Revenue, 12 months
- $151.2B
- +49% on a year ago
- Net margin
- 7.5%
- Free cash flow yield
- 2.3%
Priced as an AI company on a hardware maker's margins
Revenue is up by half and the stock nearly fourfold in a year. The argument is how much of each AI server's price Dell gets to keep.
The stock is nearly four times what it was a year ago
Dell's share price was 145.76 a year ago and is 574.00 today, up 294%. It bottomed at 111.07 on January 20, and most of the gain came between early April and early July, from 177.69 to 417.28. It sits 2.4% below its 588.40 high of September 17. Market value went from 97.5 billion dollars to 365 billion. That is 2.4 times a year of sales, against a ten year median of 0.7.
About 1.7 times its usual multiple, still below its peers
Dell trades at 33.3 times the last twelve months of earnings, higher than about 95% of the last ten years. The ten year median is 19.8 and the five year median 19.3. Its seven computer hardware peers sit at a median of 36.7, so Dell still trades below them. For most of this chart the market priced Dell as a PC and server maker. The premium is to its own past, not to its peers.
A flat business started growing fast
Revenue over the last twelve months is 151.2 billion dollars, up 49% from 101.45 billion a year earlier. For the two years before that it sat between 88 and 101 billion. In the July quarter Dell booked 60.9 billion dollars of AI server orders and ended with a 95 billion AI backlog, about 63% of a year's sales. It raised its full-year revenue guide to 192 billion from 167 billion.
Thinner gross margins, more profit, on volume
Operating margin over the last twelve months is 9.4% and net margin 7.5%, both ten year highs. Gross margin is 19.8%, against a ten year median of 23.4%, and only 4.4% of days were lower. Dell keeps less of each sales dollar and earns more by selling far more. The fear: if chip and memory costs rise faster than Dell can reprice, that thin slice shrinks. And the profit has not all turned into cash.
Cash has trailed the profits
Free cash flow is the cash left after running and investing in the business. Over the last twelve months it was 8.56 billion dollars, against 11.38 billion of net income, about 75 cents per dollar of profit. Divided by market value that is a 2.35% yield, against a five year median of 5.78% and a ten year median of 8.61%. One reason: inventory doubled between January and July, which ties up cash.
The price assumes earnings rise by half again
Consensus sees adjusted earnings of 28.23 a share over the next twelve months, up 54% from 18.38. Adjusted is Dell's own measure, before stock pay and amortization. At 574 that is 20.3 times, about twice its ten year median of 10.1, and 17.1 times the four quarters after. Points before September 25 are rebuilt with today's estimates. On November 24, watch sales against the 49.24 billion consensus.
What has happened lately
Headlines link to the original source.
Charts
Financials
| Income statement | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | Q3 FY25 | Q4 FY25 | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $22.3B | $22.3B | $22.2B | $25B | $24.4B+10% | $23.9B+7% | $23.4B+5% | $29.8B+19% | $27B+11% | $33.4B+40% | $43.8B+88% | $47B+58% | |
| Cost of revenue | $17.1B | $16.9B | $17.4B | $19.7B | $19B+12% | $18.3B+8% | $18.4B+6% | $24.3B+24% | $21.4B+13% | $26.6B+46% | $36.1B+96% | $37.1B+53% |
| Gross profit | $5.2B | $5.4B | $4.9B | $5.4B | $5.4B+3% | $5.7B+6% | $4.9B+2% | $5.4B+2% | $5.6B+4% | $6.7B+19% | $7.8B+58% | $9.8B+81% |
| R&D | $692M | $716M | $763M | $780M | $745M+8% | $773M+8% | $808M+6% | $785M+1% | $752M+1% | $797M+3% | $983M+22% | $1.1B+41% |
| SG&A | $3B | $3.1B | $3.1B | $3.2B | $2.9B−3% | $2.7B−12% | $3B−5% | $2.9B−9% | $2.7B−6% | $2.8B+4% | $3.1B+6% | $3.3B+16% |
| $1.5B | $1.5B | $965M | $1.4B | $1.7B+12% | $2.2B+40% | $1.2B+21% | $1.8B+27% | $2.1B+23% | $3.1B+43% | $3.7B+214% | $5.4B+204% | |
| Interest expense | $372M | $374M | $359M | $387M | $328M−12% | $344M−8% | $361M+1% | $399M+3% | $396M+21% | $411M+20% | $391M+8% | $254M−36% |
| Pre-tax income | $1.2B | $1.3B | $592M | $1B | $1.4B+17% | $2B+47% | $1.1B+83% | $1.4B+39% | $1.9B+34% | $2.8B+42% | $3.9B+265% | $5.1B+256% |
| $183M | $136M | −$400M | $157M | $275M+50% | $440M+224% | $118M | $276M+76% | $393M+43% | $540M+23% | $510M+332% | $998M+262% | |
| Net income | $1.1B | $1.2B | $997M | $887M | $1.2B+12% | $1.5B+27% | $965M−3% | $1.2B+31% | $1.5B+32% | $2.3B+47% | $3.4B+256% | $4.1B+255% |
| $1.42 | $1.66 | $1.32 | $1.23 | $1.64+16% | $2.15+30% | $1.37+4% | $1.70+38% | $2.28+39% | $3.37+57% | $5.24+283% | $6.34+273% | |
| 740M | 729.6M | 727M | 724M | 717M−3% | 713M−2% | 702M−3% | 686M−5% | 680M−5% | 670.3M−6% | 656M−7% | 652M−5% |
From each company's 10-Q and 10-K filings. Fiscal years are four fiscal quarters added up; balance sheet lines are as of the period's end. Growth is on the same period a year earlier.
Estimates
Next earnings report: .
Analyst consensus for the next eight quarters, with the range from the lowest to the highest estimate, is part of Superworth Pro.
Peers
Companies in Computer Hardware within ten times Dell Technologies's size, closest in size first.
| Company | Market cap | PE | Its 10y median PE | Fwd PE | P/S | Revenue growth | Net margin |
|---|---|---|---|---|---|---|---|
| DELLDell Technologies Inc. | $365.4B | 33.6× | 19.8× | 2.4× | +49% | 7.5% | |
| ANETArista Networks, Inc. | $267.3B | 68.1× | 43.3× | 25.8× | +33% | 38.4% | |
| SNDKSandisk Corporation | $235.5B | 22.9× | 24.5× | 12.2× | +175% | 56.5% | |
| STXSeagate Technology Holdings plc | $176.6B | 58.1× | 15.9× | 15.0× | +34% | 26.1% | |
| WDCWestern Digital Corporation | $142.1B | 16.3× | 24.7× | 11.3× | +36% | 72.9% | |
| HPEHewlett Packard Enterprise Company | $94.1B | 37.5× | 18.1× | 2.3× | +27% | 6.7% | |
| PEverpure, Inc. | $50.8B | 209× | 178× | 11.9× | +27% | 5.9% | |
| NTAPNetApp, Inc. | $45.4B | 33.3× | 21.0× | 6.3× | +12% | 19.2% | |
| Peer median | $142.1B | 37.5× | 24.5× | 11.9× | +33% | 26.1% |
About
- Chief executive
- Michael Dell, since 2007FounderFounded Dell in 1984, CEO again since 2007, also chair. Source
- Industry
- Computer Hardware
- Sector
- Technology
Valuation data, not investment advice. Prices as of .