Seagate Technology (NASDAQ:STX) Shares Up 4.5% Following Strong Earnings

Key Points

• Seagate shares rose 4.5% after the company reported fiscal first-quarter earnings of $7.68 per share and $4.23 billion in revenue, exceeding analyst estimates of $7.45 and $4.15 billion. Revenue increased 61% year over year, supported by strong data-center demand and favorable pricing.
• Management forecast approximately $4.8 billion in revenue and $9.20 in non-GAAP EPS for the December quarter, citing robust AI and cloud-storage demand, higher prices, and continued HAMR adoption.
• Seagate raised its quarterly dividend 2.7% to $0.76 per share, though its roughly 0.4% yield suggests investors are primarily focused on the company’s growth potential rather than income.

Seagate Technology Holdings PLC (NASDAQ:STX - Get Free Report)'s share price rose 4.5% during trading on Wednesday following a stronger than expected earnings report. The stock traded as high as $698.94 and last traded at $697.97. Approximately 10,724,736 shares traded hands during trading, an increase of 140% from the average daily volume of 4,460,732 shares. The stock had previously closed at $667.85.

The data storage provider reported $7.68 earnings per share for the quarter, topping the consensus estimate of $7.45 by $0.23. The firm had revenue of $4.23 billion during the quarter, compared to analyst estimates of $4.15 billion. Seagate Technology had a return on equity of 369.98% and a net margin of 26.11%. The company's revenue for the quarter was up 61.0% on a year-over-year basis. During the same period in the previous year, the company earned $2.61 EPS.

Seagate Technology Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, January 7th. Stockholders of record on Wednesday, December 23rd will be given a $0.76 dividend. This is a positive change from Seagate Technology's previous quarterly dividend of $0.74. This represents a $3.04 dividend on an annualized basis and a dividend yield of 0.4%. The ex-dividend date of this dividend is Wednesday, December 23rd. Seagate Technology's payout ratio is 21.33%.

Key Seagate Technology News

Here are the key news stories impacting Seagate Technology this week:

• Positive Sentiment: Seagate reported fiscal Q1 revenue of $4.23 billion, up 61% year over year, and non-GAAP earnings of $7.68 per share, exceeding consensus estimates of $4.15 billion and $7.45 per share. Data-center revenue rose 63%, while record cash flow and favorable pricing boosted profitability. Seagate Technology Reports Fiscal First Quarter 2027 Financial Results
• Positive Sentiment: Management projected roughly $4.8 billion in December-quarter revenue and $9.20 in non-GAAP EPS. Strong AI and cloud-storage demand, higher prices, HAMR adoption and supply commitments extending through 2028–2030 support the longer-term growth outlook. Data-center customers represented 90% of shipped capacity. Seagate Q1 Earnings Call Highlights Strong Demand and HAMR Expansion
• Positive Sentiment: Seagate raised its quarterly dividend 2.7% to $0.76 per share. However, the approximately 0.4% yield indicates that investors are valuing STX primarily as a high-growth AI-storage company rather than an income stock. Seagate Just Raised Its Dividend
• Neutral Sentiment: Analyst opinion remains divided. Wells Fargo, TD Cowen and Morgan Stanley lowered price targets but retained bullish ratings, while Wedbush maintained a $1,000 target. Summit Insights downgraded the stock to “hold,” and Susquehanna cut its target to $765 with a neutral rating.
• Negative Sentiment: The earnings beat did not clear an elevated bar after STX’s substantial rally. Investors are concerned that exabyte shipment growth and margin expansion could slow, while the stock’s premium valuation leaves less room for execution disappointments. Profit-taking after the results added to the pressure. Seagate Q1 Earnings Beat, Stock Plunges

Wall Street Analysts Forecast Growth

Several analysts recently issued reports on the stock. Robert W. Baird set a $1,350.00 price objective on shares of Seagate Technology in a report on Wednesday. Evercore reiterated an "outperform" rating on shares of Seagate Technology in a report on Wednesday. UBS Group reissued a "neutral" rating and set a $750.00 target price on shares of Seagate Technology in a research report on Wednesday. TD Cowen cut their target price on shares of Seagate Technology from $1,000.00 to $900.00 and set a "buy" rating for the company in a research report on Wednesday. Finally, Zacks Research cut shares of Seagate Technology from a "strong-buy" rating to a "hold" rating in a report on Monday, September 28th. Twenty-two research analysts have rated the stock with a Buy rating and six have given a Hold rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus target price of $971.64.

Insiders Place Their Bets

In other news, CEO William Mosley sold 97,889 shares of the firm's stock in a transaction on Tuesday, September 15th. The shares were sold at an average price of $772.14, for a total value of $75,584,012.46. Following the sale, the chief executive officer owned 378,108 shares in the company, valued at approximately $291,952,311.12. This trade represents a 20.57% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, EVP John Morris sold 15,466 shares of the business's stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $772.15, for a total transaction of $11,942,071.90. Following the transaction, the executive vice president directly owned 31,132 shares in the company, valued at $24,038,573.80. This trade represents a 33.19% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 467,506 shares of company stock valued at $379,191,992 in the last three months. 0.51% of the stock is owned by corporate insiders.

Institutional Trading of Seagate Technology

A number of hedge funds have recently bought and sold shares of STX. Retirement Wealth Solutions LLC raised its position in shares of Seagate Technology by 70.6% during the second quarter. Retirement Wealth Solutions LLC now owns 29 shares of the data storage provider's stock valued at $28,000 after buying an additional 12 shares during the last quarter. Jones Financial Companies Lllp acquired a new stake in Seagate Technology during the second quarter worth about $39,000. One River Asset Management LLC increased its stake in Seagate Technology by 50.0% during the third quarter. One River Asset Management LLC now owns 45 shares of the data storage provider's stock valued at $42,000 after acquiring an additional 15 shares during the period. Creative Capital Management Investments LLC increased its stake in Seagate Technology by 104.5% during the third quarter. Creative Capital Management Investments LLC now owns 45 shares of the data storage provider's stock valued at $42,000 after acquiring an additional 23 shares during the period. Finally, Laurel Wealth Advisors LLC bought a new position in Seagate Technology during the third quarter valued at about $42,000. 92.87% of the stock is owned by institutional investors.

Seagate Technology Stock Performance

The firm has a fifty day simple moving average of $809.95 and a 200 day simple moving average of $682.75. The company has a current ratio of 1.67, a quick ratio of 1.17 and a debt-to-equity ratio of 1.56. The stock has a market cap of $158.71 billion, a price-to-earnings ratio of 50.29 and a beta of 2.06.

About Seagate Technology

Seagate Technology Holdings plc NASDAQ: STX is a data storage company that develops and manufactures mass-capacity storage products and solutions. Its portfolio is centered on hard disk drives (HDDs) used in cloud data centers, enterprise systems, network-attached storage, video and imaging applications, and personal computers.

The company also provides storage-related services and solutions designed to help organizations store, manage, protect, and access large volumes of digital information.

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