Is Dell Technologies A Buy After Reporting Its Q3 Earnings?

Computer hardware giant Dell Technologies Inc. (DELL) provides information technology solutions. The stock has lost 49% in price over the past month to close Friday’s trading session at $56.18. However, its shares soared after the company posted the ‘best third quarter’ in its history, driven by robust demand, durable competitive advantages, and strong execution.

DELL’s non-GAAP net revenue increased 21% year-over-year to $28.41 billion for its fiscal third quarter, which ended October 29, 2021. Its adjusted EBITDA came in at $3.41 billion, up 6% year-over-year. Also, its non-GAAP net income increased 18% year-over-year to $2.02 billion, while its non-GAAP EPS came in at $2.37, representing a 17% year-over-year rise.

silver laptop on brown wooden table

Photo by XPS on Unsplash

DELL’s stock edged up in price after the company completed the spin-off of VMware, Inc. (VMW) on November 1, 2021. The spin-off included an $11.50 billion special cash dividend. In September 2021, DELL forecasted annual revenue growth of 3% – 4% through 2026 and announced plans for a $5 billion share repurchase. In addition, hedge funds’ interest in the stock has increased lately. So, DELL’s near-term prospects look promising.

Here are the factors that could influence DELL’s performance in the upcoming months:

Consistent Product And Services Innovation

On October 13, DELL announced several edge innovations across its infrastructure and PC portfolio, including Dell EMC VxRail satellite nodes and Dell Technologies Validated Design for Manufacturing Edge with Litmus, to help organizations simplify deployments and capture more value from data generated and processed outside the traditional data center and public cloud. Also on that day, the company introduced new telecom software, solutions, and services to help communications service providers (CSPs) accelerate their open, cloud-native network deployments and create new revenue opportunities at the edge.

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