Seagate Bulls Have No Memory
Dichotomy Capital • 11 Comments
Dichotomy Capital • 11 Comments
Wed, Aug. 10, 12:21 PM
- Seagate (STX -1.5%) announced "the largest SSD ever demonstrated" at the Flash Memory Summit in Santa Clara, California.
- Such a device is capable of storing 400 million social media-capacity photos or 12,000 DVD movies.
- The architecture provides the lowest cost per gigabyte for flash presently available, with the flexibility to eventually manage 100TB of data.
- A release is planned for 2017.
Tue, Aug. 2, 3:36 PM
- After opening in positive territory this morning, Seagate (STX -5.4%) shares sharply reversed for the remainder of the trading session.
- The company posted better-than-expected quarterly results though has realized a more than 8% decline since then. Several analysts today have restated confidence in the company.
- Needham & Company analyst Richard Kugele reissues a Buy rating and raises his price target to $39 up from $33 (current price $30.70). He notes: "Once again, in the face of a bleak outlook earlier in the year, Seagate successfully pivoted and rallied to meet the challenge. With a clear focus on completing its footprint consolidation and realigning the business to deliver the exabytes required in the nearline CSP world, we believe F4Q represents a major inflection point in the model."
- RBC Capital analyst Amit Daryanani reissues a Sector perform rating and raises his price target to $31 up from $27 citing tempered near-term investor excitement due to management comments on hyperscale demand and restrained free cash flow. He also sees cost controls benefiting operating and cost of goods sold expenses going forward.
- Wells Fargo analyst Maynard Um reissues a Market perform rating and raises his price target range to $28-$32 up from $26-$29. He notes: "Seagate is managing what’s in its control well – reducing capacity, restructuring, limiting capex spend, accelerating certain HDD products, etc." He additionally cites near-term share stabilization, long-term downward pressure within the end market and projected revenue declines should Seagate not successfully shift its product mix to higher ASP products or raise its prices.
- BMO Capital analyst Tim Long reissues a Market perform rating and raises his price target to $31 up from $22. He cites improved sequential gross margin that looks to continue trending higher as a result of the company's restructuring efforts and raises his FY 2017 EPS estimate to $3.04 up from $1.99.
Tue, Aug. 2, 9:49 AM
- Seagate (STX +2.2%) registered better-than-estimated numbers in its Q4 report, though revenue is down 9.2% from this point last year.
- Q4 gross margin of 25.8%, net income of $207M and $269M in operating cash flow. Cash dividends paid totaling $188M.
- FY 2016 revenue of $11.2B, gross margin of 24.6%, net income of $684M and operating cash flow of $1.7B. Cash dividends paid totaling $727M.
- FY cash, cash equivalents, restricted cash, and short-term investments of $1.1B. 299M ordinary shares issued and outstanding.
- Quarterly cash dividend approved of $0.63 per share payable on October 5 to shareholders of record from market close on September 21.
- Shipped 61.7 exabytes in Q4, 24.7 of which shipped in nearline storage (+88% Y/Y). Average capacity per drive up 46% Y/Y to 1,674 GB.
- Shipped 233.1 exabytes in FY 2016, 69.7 of which shipped in nearline storage (+28% Y/Y). Average capacity per drive up 29% Y/Y to 1,379 GB.
- Seagate Technology CEO Steve Luczo: "I am confident of the Company’s long-term sustainability and prosperity in a world of significant data creation and high-capacity storage demand driven by emerging technologies, and cloud infrastructure deployments. We believe we have the leading storage technology product portfolio, technology roadmap and operational leverage to ensure we are well-positioned for long-term success and shareholder value."
- Seagate Technology earlier in the quarter announced it was cutting 3% of its workforce. This restructuring effort is expected to be complete by the end of the September quarter.
- The company is up more than 40% on a 1-month basis, more than 60% on a 3-month basis and down around 35% since last year.
- Conference call
- Press release
- Financial statements
- Supplemental information
Tue, Aug. 2, 9:17 AM
- Gainers: SINO +64%. ESEA +28%. ADXS +25%. TRXC +25%. TOPS +17%. CTRV +17%. CGNX +15%. CBIO +12%. AMKR +12%. SODA +11%. PSTI +10%. VGZ +8%. AVP +8%. KOOL +8%. MNK +7%. GKOS +7%. HZNP +6%. OGEN +6%. OCN +6%. WMB +6%. STX 5%. ROSG 6%. NYRT 5%. INO 5%.
- Losers: IDTI -13%. TXRH -10%. ANGO -9%. GLOP -8%. ALLT -6%.
Tue, Aug. 2, 8:02 AM
Mon, Aug. 1, 5:30 PM
- ABC, ACCO, ADM, AET, AFSI, ALLT, ARW, AVP, BOFI, CAH, CARB, CEQP, CHH, CIE, CMI, CPPL, CSTM, CVS, DISCA, ECL, EIGI, EMR, ENOC, EPC, ETN, ETR, EXPD, FDP, GEO, GLT, GNRC, H, HCLP, HCN, HEP, HMC, HRS, HW, IDCC, IDXX, IIVI, IPI, IQNT, JLL, MLM, MMP, MNK, MOS, MZOR, NI, NJR, NNN, NRZ, NS, NWN, OZM, PBI, PFE, PG, PNW, RCL, RDC, RHP, SABR, SALE, SCAI, SHOO, SHPG, SODA, STX, SUI, TAP, TDC, VG, VSH, WCG, WNR, WNRL, XYL, ZEUS
Tue, Jul. 19, 3:39 AM
- Scientists reveal method for storing rewritable digital data at record density.
- Involves rearranging individual chlorine atoms on a sheet of copper.
- Provides roughly 100x more data per square inch than the world's most efficient hard drive.
- Could write the entire contents of the Library of Congress in a space smaller than a dust mite.
- Key challenge is speed.
- Source links: Nature, Popular Mechanics
- Also see Richard Feynman's There's Plenty of Room at the Bottom lecture
- Disk drive stocks: OTCPK:CBEX, EMC, HILL, HTCH, IBM, IMN, IVAC, NTAP, QBAK, SXCL, SMIT, STX, VECO, WDC
Tue, Jul. 12, 3:00 PM
Tue, Jul. 12, 12:46 PM
Tue, Jul. 12, 10:45 AM
- Already bullish in its belief Seagate (STX +19.9%) can earn $3-$3.50 per share next year, Brean's Ananda Baruah says last night's upward guidance suggests the company can do even better.
- "We continue to feel very good about our counter-consensus view on CY17 EPS," says Baruah, lifting the price target to $35 from $30 (vs. current $28.76).
- Caught with an Underweight rating, Morgan Stanley quickly upgrades to Equal-weight, with price target of $27 raised from $20.
Tue, Jul. 12, 9:24 AM
Mon, Jul. 11, 5:50 PM
- Seagate Technology (NASDAQ:STX) after hours released forecasts projecting higher than expected fourth quarter revenue.
- Shares are +12.70% in after hours trading.
- Company estimates are coming in at $2.65B whereas analysts had the company pegged at $2.32B.
- 6,500 job cuts also announced totaling 14% of the company's global headcount.
- Restructuring in an effort to allow company to operate within target non-GAAP product gross margin range of 27-32% by December 2016 quarter.
- 25% gross margin, non-GAAP gross margin approximately 25.8%.
- Anticipates shipments of around 37 million HDD units, totaling an estimated 62 exabytes, average capacity per drive of 1.7 terabytes and a $67 average selling price per unit.
- Previous company estimates for 4Q 2016 were forecasted at $2.3B revenue and 25.8% non-GAAP gross margin.
- Revenue difference attributed to better than expected demand for HDD products, gross margin difference attributed to better than expected demand for enterprise HDD products as well as cost containment execution.
Mon, Jul. 11, 5:37 PM
Mon, Jul. 11, 4:12 PM
Thu, Jul. 7, 11:05 AM
- A boost in guidance from Western Digital (WDC +4.1%) is helping to lift some other chip stocks.
- The strong read-through on NAND chip sales have stoked some buying action on Micron (MU +5.1%), Seagate Technology (STX +1.7%), and Applied Materials (AMAT +1.2%) on optimism that NAND pricing will hold up in the second half of the year.
- Previously: Western Digital higher after hours on lift in guidance; CFO to exit (July 6)
Wed, Jun. 29, 4:28 PM
- Seagate Technology (STX +6.3%) is cutting 1,600 jobs worldwide as part of a restructuring plan, according to an SEC filing.
- That's about 3% of its workforce. The company's making the moves to cut costs and expects to wrap them up by the end of its September quarter.
- It'll take a pretax charge of $62M that it will record mainly in fiscal Q4, consisting primarily of termination costs from the September quarter.
- It expects about $100M in savings on an annual run rate basis and "impacting cost of revenue and operating expenses favorably by approximately $48 million and $52 million, respectively."
- Shares are flat so far in after-hours trading.
Seagate Technology Plc engages in the provision of electronic data storage technologies and solutions. Its products and services include network attached storage, high performance computing, data protection appliances, internal hard drives, backup and recovery services, flash storage, and... More
Industry: Data Storage Devices
Country: United States