Dell Earnings Preview - Will AI Impact Sales?
Close-up of signage at the regional headquarters of Dell Computers in the Silicon Valley town of ... More Santa Clara, California, July 25, 2017. (Photo via Smith Collection/Gado/Getty Images).
Dell Technologies is scheduled to report earnings after Thursday's close. The stock hit a record high near $179.70/share in 2024 and, as of this writing, it is currently trading near $113. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
The company is expected to report a gain of $1.69/share on $23.10 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $1.76/share. The Whisper number is the Street's unofficial view on earnings.
Charts & Data Courtesy MarketSurge
The company's earnings have been volatile over the last few years but are projected to grow going forward. In 2020, the company earned $7.35/share. In 2021, the company earned $4.88. In 2022, earnings grew to $6.22 and in 2023 earnings came in at $7.61. In 2024, the company earned $7.37. Looking forward, earnings are expected to grow to $8.14 in 2025, $9.21 in 2026, and $10.37 in 2027, largely due to AI. Meanwhile, the stock sports a price to earnings ratio of only 14 which is 0.6x the S&P 500.
Technically, the stock has been in a downtrend since May 2024 but is currently trying to bottom. It managed to get above its declining 50 and 200 day moving average lines which is a welcomed sign for the bulls. The stock is 36% below its 52-week high which means it still has a lot of ground to recover. After earnings, the bulls want to see the stock gap up and rally and the bears want to see it gap down and fall.
Here's the company profile, according to Yahoo! Finance:
Dell Technologies Inc. designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services in the Americas, Europe, the Middle East, Asia, and internationally.
The company operates in two segments, Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG). The ISG segment provides modern and traditional storage solutions, including all-flash arrays, scale-out file, object platforms, hyper-converged infrastructure, and software-defined storage; and general-purpose and AI-optimized servers.
This segment also offers networking products and services comprising wide area network infrastructure, data center and edge networking switches, and cables and optics that help its business customers to transform and modernize their infrastructure and complementing its server and storage solutions; and software, peripherals, and services, including consulting and support, and deployment.
The CSG segment provides notebooks, desktops, and workstations and branded peripherals that include displays, docking stations, keyboards, mice, webcam and audio devices, and third-party software and peripherals; and configuration, support and deployment, and extended warranties services.
The company is involved in originating, collecting, and servicing customer financing arrangements; and offers payment and consumption solutions and services, such as as-a-Service, subscription, utility, leases, and loans, as well as fixed-term loans.
It serves enterprises, governmental agencies and other public institutions, educational institutions, healthcare organizations, small and medium-sized businesses, and consumers.
The company was formerly known as Denali Holding Inc. and changed its name to Dell Technologies Inc. in August 2016. Dell Technologies Inc. was founded in 1984 and is headquartered in Round Rock, Texas.
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
Disclosure: The stock has been featured on FindLeadingStocks.com
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