Seagate Technology Holdings plc Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Seagate Technology Holdings plc (NASDAQ:STX) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Seagate Technology Holdings reported US$4.2b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$7.59 beat expectations, being 6.5% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Seagate Technology Holdings' 21 analysts is for revenues of US$20.3b in 2027. This reflects a sizeable 47% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 107% to US$39.61. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$19.1b and earnings per share (EPS) of US$34.96 in 2027. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a substantial gain in earnings per share in particular.
See our latest analysis for Seagate Technology Holdings
As a result, it might be a surprise to see thatthe analysts have cut their price target 5.4% to US$1,045, which could suggest the forecast improvement in performance is not expected to last. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Seagate Technology Holdings, with the most bullish analyst valuing it at US$1,588 and the most bearish at US$700 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Seagate Technology Holdings' growth to accelerate, with the forecast 68% annualised growth to the end of 2027 ranking favourably alongside historical growth of 0.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Seagate Technology Holdings is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Seagate Technology Holdings following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Seagate Technology Holdings' future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Seagate Technology Holdings going out to 2029, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Seagate Technology Holdings that we have uncovered.
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