We've been asking ourselves recently if the market has placed a fair valuation on Seagate Technology. Let's dive into some of the fundamental values of this Large-Cap Technology company to determine if there might be an opportunity here for value-minded investors.
Seagate Technology's Valuation Is in Line With Its Sector Averages:
Seagate Technology Holdings plc engages in the provision of data storage technology and infrastructure solutions in Singapore, the United States, the Netherlands, and internationally. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 30.44. In contrast, Seagate Technology has a trailing 12 month P/E ratio of 33.3 based on its earnings per share of $6.76.
Seagate Technology has moved 100.5% over the last year compared to 13.8% for the S&P 500 -- a difference of 86.7%. Seagate Technology has a 52 week high of $264.83 and a 52 week low of $63.19.
The Company's Revenues Are Declining:
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $10,509 | $10,681 | $11,661 | $7,384 | $6,551 | $9,097 |
| Operating Margins | 12% | 14% | 17% | -5% | 7% | 21% |
| Net Margins | 10% | 12% | 14% | -7% | 5% | 16% |
| Net Income (M) | $1,004 | $1,314 | $1,649 | -$529 | $335 | $1,469 |
| Net Interest Expense (M) | $201 | $220 | $249 | $313 | $332 | $324 |
| Depreciation & Amort. (M) | $379 | $397 | $451 | $513 | $264 | $251 |
| Diluted Shares (M) | 259 | 225 | 206 | 209 | 217 | 217 |
| Earnings Per Share | $3.79 | $5.36 | $7.36 | -$2.56 | $1.58 | $6.77 |
| EPS Growth | n/a | 41.42% | 37.31% | -134.78% | 161.72% | 328.48% |
| Avg. Price | $45.59 | $79.48 | $85.72 | $85.37 | $226.03 | $226.03 |
| P/E Ratio | 11.9 | 14.64 | 11.43 | -33.35 | 141.27 | 32.62 |
| Free Cash Flow (M) | $1,129 | $1,128 | $1,276 | $626 | $664 | $818 |
| CAPEX (M) | $585 | $498 | $381 | $316 | $254 | $265 |
| EV / EBITDA | 8.48 | 11.35 | 9.62 | 136.08 | 79.14 | 26.7 |
| Total Debt (M) | $4,156 | $4,894 | $6,026 | $6,352 | $10,390 | $9,990 |
| Net Debt / EBITDA | 1.48 | 1.78 | 2.18 | 32.54 | 12.78 | 4.25 |
| Current Ratio | 1.51 | 1.49 | 1.13 | 1.04 | 1.23 | 1.38 |
Seagate Technology has declining revenues and decreasing reinvestment in the business, positive cash flows, and a highly leveraged balance sheet. On the other hand, the company benefits from strong operating margins with a positive growth rate and a strong EPS growth trend. Furthermore, Seagate Technology has just enough current assets to cover current liabilities, as shown by its current ratio of 1.38.
