We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Dump Seagate Technology (STX) Stock
Read MoreHide Full Article
On Jul 19, Zacks Investment Research downgraded Seagate Technology plc. (STX - Free Report) to a Zacks Rank #5 (Strong Sell).
Earnings estimates for Seagate have been revised downward over the last 30 days for 2017 and 2018. Notably, the Zacks Consensus Estimate for 2017 remained unchanged at $4.46, while that for 2018 declined to $4.70 from $4.75 over the same time period. The downgrade can primarily be attributed to declining product demand, competitive market structure, sluggish macroeconomic environment and IT spending trends.
We believe Seagate’s significant investments in HAMR technology, 10 and 12 terabyte Helium HDD and fourth generation SMR technology will take some more time to translate into credible top-line growth.
Notably, Seagate’s shares have underperformed the S&P 500 on a year-to-date basis. While the index gained 10.1%, the stock returned 1.7%.
Seagate is experiencing a downturn primarily due to declining demand in the PC market as evident from Gartner and IDC’s recently released worldwide PC shipments data.
Shift in demand from PCs to inexpensive mobile devices is hurting the growth of hard disk drives (HDD) manufacturers like Seagate. Moreover, the merger of Western Digital and SanDisk has intensified competition in the storage industry, particularly in the solid state drive (SSD) market. This remains an overhang on the company.
The company is diversifying its product portfolio to outweigh the negative impact of diminishing HDD market, thereby lessening the risk of customer concentration. However, the products are at a very nascent stage to contribute positively to its top-line growth.
Seagate faces pricing pressure because of high volatility in the DRAM and NAND space, which led to the company maintaining low inventories in the current quarter.
Long-term earnings growth rates for KLA-Tencor, Veeva and Applied Optoelectronics are projected to be 21.24%, 19.64% and 18.75%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Dump Seagate Technology (STX) Stock
On Jul 19, Zacks Investment Research downgraded Seagate Technology plc. (STX - Free Report) to a Zacks Rank #5 (Strong Sell).
Earnings estimates for Seagate have been revised downward over the last 30 days for 2017 and 2018. Notably, the Zacks Consensus Estimate for 2017 remained unchanged at $4.46, while that for 2018 declined to $4.70 from $4.75 over the same time period. The downgrade can primarily be attributed to declining product demand, competitive market structure, sluggish macroeconomic environment and IT spending trends.
We believe Seagate’s significant investments in HAMR technology, 10 and 12 terabyte Helium HDD and fourth generation SMR technology will take some more time to translate into credible top-line growth.
Notably, Seagate’s shares have underperformed the S&P 500 on a year-to-date basis. While the index gained 10.1%, the stock returned 1.7%.
Intensifying Competition & Declining Demand Remain Headwinds
Seagate is experiencing a downturn primarily due to declining demand in the PC market as evident from Gartner and IDC’s recently released worldwide PC shipments data.
Shift in demand from PCs to inexpensive mobile devices is hurting the growth of hard disk drives (HDD) manufacturers like Seagate. Moreover, the merger of Western Digital and SanDisk has intensified competition in the storage industry, particularly in the solid state drive (SSD) market. This remains an overhang on the company.
The company is diversifying its product portfolio to outweigh the negative impact of diminishing HDD market, thereby lessening the risk of customer concentration. However, the products are at a very nascent stage to contribute positively to its top-line growth.
Seagate Technology PLC Revenue (TTM)
Seagate Technology PLC Revenue (TTM) | Seagate Technology PLC Quote
Seagate faces pricing pressure because of high volatility in the DRAM and NAND space, which led to the company maintaining low inventories in the current quarter.
Stocks to Consider
Better-ranked stocks in the broader sector include KLA-Tencor (KLAC - Free Report) , Veeva System (VEEV - Free Report) and Applied Optoelectronics (AAOI - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for KLA-Tencor, Veeva and Applied Optoelectronics are projected to be 21.24%, 19.64% and 18.75%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>.