Dell Technologies Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Dell Technologies Inc. (NYSE:DELL) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a credible result overall - although revenues of US$94b were what the analysts expected, Dell Technologies surprised by delivering a (statutory) profit of US$4.22 per share, an impressive 26% above what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Dell Technologies after the latest results.
View our latest analysis for Dell Technologies
Following the latest results, Dell Technologies' 16 analysts are now forecasting revenues of US$97.9b in 2022. This would be an okay 3.9% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to tumble 26% to US$3.25 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$94.6b and earnings per share (EPS) of US$2.17 in 2022. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a massive increase in earnings per share in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.4% to US$86.61per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Dell Technologies analyst has a price target of US$101 per share, while the most pessimistic values it at US$72.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Dell Technologies shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Dell Technologies' revenue growth will slow down substantially, with revenues next year expected to grow 3.9%, compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Dell Technologies is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dell Technologies' earnings potential next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Dell Technologies going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we've spotted with Dell Technologies (including 1 which is a bit concerning) .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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