Key points
- Dell just emerged from a long period of consolidation ahead of its next earnings report on February 29th.
- The company’s shares have shown a strong performance, up nearly 15% year-to-date and a notable 109% year-over-year.
- Analyst sentiment on Dell is generally bullish, with recent improvements from JPMorgan Chase & Co. and UBS Group, although the consensus price target suggests a potential 8% downside.
- 5 stocks we like better than Dell Technologies
Ahead of its next earnings report on February 29, Dell Technologies NYSE: DELL it just came out of a long consolidation. Year to date, the tech and computing giant is now up nearly 15% and a whopping 109% from the previous year.
The company has recently received several favorable updates from analysts and has continued its upward trend ahead of its earnings report. With the stock in an uptrend and significantly outperforming its sector and the overall market, could it be a buy ahead of its next earnings report?
Let’s take a closer look at its previous earnings report, current pattern, and what you can expect in its next earnings release to better gauge sentiment.
Snapshot by Dell Technologies
Dell Technologies is a global information technology company headquartered in Round Rock, Texas. It specializes in creating, marketing and supporting various products, including personal computers, servers, data storage devices, network switches, software and other technology solutions. Its offerings cater to consumers, small businesses and large enterprises worldwide.
The company’s shares offer a dividend yield of 1.68% and have a price-to-earnings (P/E) ratio of 24.27, placing them slightly above attractive value territory. However, its forward P/E of 12.73 represents an attractive prospect for value investors. The stock, now valued at nearly $65 billion, is trading at the high end of its 52-week range and has an average daily volume of nearly 4 million shares.
Dell will report earnings on February 29
Dell previously released quarterly earnings data on November 30, 2023. The company reported EPS of $1.88 for the quarter, beating analysts’ expectations of $1.46 by $0.42. Despite revenue of $22.25 billion during the quarter, slightly lower than analysts’ estimates of $23.01 billion, Dell reported a revenue decline of 10.0% compared to the same quarter last year.
Over the last year, Dell has earned $3.62 in earnings per share. Looking ahead, Dell expects earnings growth of 6.36%, forecasting an increase from $5.66 to $6.02 per share over the next year.
The company confirmed that its next quarterly earnings report will be released on Thursday, February 29, 2024, with an earnings conference call scheduled for 4:30 PM Eastern on the same day.
Analysts are bullish but do not foresee upside potential
Dell has a Moderate Buy rating based on fifteen analyst ratings. Its rating is in line with other information and technology companies in the S&P 500 and higher than the S&P 500 consensus rating currently held.
While the rating is bullish, the consensus price target for Dell requires no further upside. The consensus price target of $81.47 projects a potential downside of 8% for Dell shares.
More recently, however, several analysts have changed their comments on Dell to the positive. On January 8, JPMorgan Chase & Co. raised the stock from neutral to overweight and raised its price target from $77 to $90. Just a few days ago, on February 16, UBS Group increased its target from $80 to $99, predicting an upside of nearly 17% on the report date.
DELL comes out ahead on earnings
As the stock approaches a significant catalyst, it is certainly setting the tone coming out of a long consolidation. Since the beginning of January, the stock has consolidated in a tight range between $82 and $87 on relatively low volumes.
Shares of the IT giant broke through consolidation resistance on Thursday and traded on unusually high volume. The price action, along with volume, could signal that the breakout may have momentum. Going forward, the previous resistance at $87 will need to serve as support ahead of its gains and thereafter if the stock wants to continue rising.
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