Seagate Technology (NASDAQ:STX) Announces Earnings Results

Seagate Technology (NASDAQ:STX) posted its earnings results on Tuesday. The data storage provider reported $7.68 EPS for the quarter, topping the consensus estimate of $7.45 by $0.23, FiscalAI reports. Seagate Technology had a net margin of 26.11% and a return on equity of 369.98%. The firm had revenue of $4.23 billion during the quarter, compared to analysts’ expectations of $4.15 billion. During the same period last year, the company posted $2.61 EPS. The company’s quarterly revenue was up 61.0% compared to the same quarter last year.

Here are the key takeaways from Seagate Technology’s conference call:

• Seagate reported a record quarter, with revenue up 61% year over year to $4.2 billion, non-GAAP EPS up 194% to $7.68, and free cash flow of nearly $1.5 billion. Management guided for December-quarter revenue of approximately $4.8 billion and EPS of $9.20.
• Data-center demand remains exceptionally strong, accounting for 90% of shipped capacity, while nearline supply is largely allocated under long-term agreements through 2028 and some customer commitments extend to 2030. Management expects mid-20% compound growth in nearline exabyte supply, supported by AI-related data creation, retention, and reuse.
• Mozaic 4, Seagate’s HAMR-based platform with capacities up to 44TB, is ramping with leading cloud providers and additional qualifications are expected soon; Mozaic 5, targeting more than 50TB, remains on track for qualification shipments late in calendar 2027. The company reiterated that HAMR should represent roughly half of nearline exabyte shipments exiting calendar 2026.
• After retiring substantial debt and regaining investment-grade status, Seagate is shifting toward shareholder returns, including a dividend increase to $0.76 per share and significantly larger share repurchases beginning in the March 2027 quarter. Management indicated a long-term goal of returning approximately 75% of free cash flow to shareholders.
• Pricing remains favorable, but higher externally sourced component costs and temporary manufacturing inefficiencies such as scrap and lower yields during product transitions are offsetting some internal cost-per-terabyte improvements. Management expects pricing and product mix to continue driving margin expansion, while noting that quarterly exabyte growth may fluctuate during technology transitions.

Seagate Technology Stock Up 1.8%

STX traded up $12.27 on Thursday, hitting $710.24. 1,923,792 shares of the company were exchanged, compared to its average volume of 4,451,894. The firm has a 50-day moving average price of $805.84 and a two-hundred day moving average price of $684.81. The company has a current ratio of 1.67, a quick ratio of 1.17 and a debt-to-equity ratio of 1.56. Seagate Technology has a twelve month low of $228.61 and a twelve month high of $1,145.00. The company has a market cap of $161.50 billion, a price-to-earnings ratio of 51.41 and a beta of 2.06.

Seagate Technology Increases Dividend

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

Insider Buying and Selling

In related news, CFO Gianluca Romano sold 49,984 shares of the company’s stock in a transaction that occurred on Tuesday, September 15th. The stock was sold at an average price of $772.16, for a total value of $38,595,645.44. Following the completion of the transaction, the chief financial officer directly owned 70,756 shares of the company’s stock, valued at $54,634,952.96. This represents a 41.40% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available 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 that occurred 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 sale, the executive vice president owned 31,132 shares of the company’s stock, valued at $24,038,573.80. This represents a 33.19% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders have sold 466,812 shares of company stock worth $378,583,042. 0.51% of the stock is owned by corporate insiders.

Key Headlines Impacting Seagate Technology

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

• Positive Sentiment: Strong earnings and revenue growth: Seagate reported fiscal Q1 EPS of $7.68, above the $7.45 consensus estimate, while revenue rose 61% year over year to $4.23 billion. Record cash flow and expanding margins were supported by strong data-center demand, favorable pricing and higher HAMR adoption. Seagate Technology Reports Fiscal First Quarter 2027 Financial Results
• Positive Sentiment: Constructive outlook: Seagate expects approximately $4.8 billion in December-quarter revenue and $9.20 in non-GAAP EPS. Management cited surging AI infrastructure demand, favorable pricing and supply commitments extending through 2030. Data-center customers represented about 90% of shipped capacity, and most nearline capacity is allocated under agreements through 2028. Seagate Q1 Earnings Call Highlights Strong Demand and HAMR Expansion
• Positive Sentiment: Analyst support and momentum: Wells Fargo maintained its Buy rating, while Wedbush reaffirmed Outperform with a $1,000 target. Zacks also identified STX as a momentum stock with strong earnings surprises and expected earnings growth. Wells Fargo Sticks to Its Buy Rating for Seagate Tech
• Neutral Sentiment: Dividend increased: Seagate raised its quarterly dividend 2.7% to $0.76 per share, although the resulting yield remains low at roughly 0.4%, limiting its immediate appeal to income-focused investors.
• Negative Sentiment: Expectations remain elevated: Despite the earnings beat and raised outlook, investors focused on slower exabyte shipment growth, potential moderation in margin expansion and valuation concerns. Several firms lowered price targets, including Citigroup, Wells Fargo, TD Cowen and Susquehanna; Summit Insights downgraded the stock to Hold. Seagate’s pullback on slower exabyte growth presents buying opportunity

Wall Street Analyst Weigh In

Several equities analysts have recently commented on STX shares. TD Cowen cut their price target on Seagate Technology from $1,000.00 to $900.00 and set a “buy” rating on the stock in a research note on Wednesday. UBS Group lowered their target price on shares of Seagate Technology from $780.00 to $750.00 and set a “neutral” rating for the company in a research note on Wednesday. Zacks Research downgraded Seagate Technology from a “strong-buy” rating to a “hold” rating in a research report on Monday, September 28th. Morgan Stanley reduced their target price on Seagate Technology from $1,200.00 to $1,148.00 and set an “overweight” rating for the company in a research note on Wednesday. Finally, Cantor Fitzgerald cut their price objective on Seagate Technology from $1,300.00 to $1,000.00 and set an “overweight” rating on the stock in a report on Monday. Twenty-two research analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $1,000.88.

Seagate Technology Company Profile

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.