DELL - Embedded Expectations Analysis - 2021 07 15
Dell Technologies Inc. (DELL:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) earnings, with a 10.8x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about revenue growth, hybrid and multi-cloud platform development, and server and storage demand.Specifically, management may lack confidence in their ability to sustain overall Q1 performance, commercial revenue growth, and Client Solutions Group (CSG) sales growth. In addition, they may have concerns about the sustainability of PowerEdge server and midrange storage demand, the P&L impact of APEX, and rising component and supply chain costs. Furthermore, management may lack confidence in their ability to create a hybrid and multi-cloud platform combining VMware and other partner ecosystems, continue upgrading their storage solutions software, and meet debt reduction targets. Finally, they may be exaggerating the capabilities of the Streaming Data Platform, the potential of SafeShutter, and the opportunities in the PC market.
Dell Technologies is a holding company. Through its subsidiaries, the company designs, develops, manufactures, markets, sells, and supports a range of products and services. The company's reportable segments are: Infrastructure Solutions Group, which includes servers, networking, and storage, as well as services and third-party software and peripherals; Client Solutions Group, which includes desktops, thin client products, and notebooks, as well as services and third-party software and peripherals; and VMware, which provides compute, cloud management, networking and security, storage and availability, and other end-user computing offerings.
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