Seagate: Good Company, But I Don't Trust The Story At This Price

Kenio Fontes2.25K FollowersFollow5ShareSavePlay(11min)CommentsSummarySeagate has reinvented itself, benefiting from renewed hyperscaler HDD demand and technological advances, like HAMR, driving strong recent revenue growth.STX’s current valuation reflects high market expectations, with shares trading at ~19–20x forward earnings and revenue growth forecasts of 15.9–25% through 2029.Risks include potential SSD competition, normalization of SSD supply, and possible declines in hyperscaler CapEx, all of which could pressure margins and revenue.I assign STX a hold rating, as the positive momentum is offset by high expectations and an uncertain medium-term demand outlook for HDDs. Justin Sullivan/Getty Images News Seagate (STX) is a case that gives me mixed feelings. The company certainly managed to reinvent itself and is surfing a very interesting momentum and knows how to create shareholder value. But at the same time, it is a technology that isThis article was written byKenio Fontes2.25K FollowersFollowEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free to reach out for collaborations or to connect!Analyst’s Disclosure: I/we have a beneficial long position in the shares of GOOGL, AMZN, NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.