Seagate Technology Holdings (NASDAQ:STX) stock performs better than its underlying earnings growth over last three years

 Seagate Technology Holdings (NASDAQ:STX) stock performs better than its underlying earnings growth over last three years


Seagate Technology Holdings plc (NASDAQ: STX) shareholders may be worried after seeing the share price fall 16% in the last quarter. But that doesn’t detract from the much more beautiful longer -term return, if you measure the past three years. The share price marched up at that time, and is now 111% higher than before. After a run like that some might not be surprised to see prices moderate. It’s only time to tell if there’s more optimism being shown right now in the share price.

Since the stock added US $ 1.7b to its market cap last week alone, let’s see if the underlying performance pushes a long-term return.

Check out our latest analysis for Seagate Technology Holdings

While efficient market speculation continues to be pointed out by some, it has been proven that markets are overly reactive dynamic systems, and investors are not always rational. An incomplete but simple way to consider how a company’s market outlook changes is to compare the change in earnings per share (EPS) to the price movement of the share.

Seagate Technology Holdings has been able to grow its EPS by 18% per year for three years, sending the share price higher. This EPS growth is less than the 28% average annual share price increase. This suggests that, as the business has grown over the past few years, it has gained the trust of market participants. It is common to see investors attracted to a business, after several years of solid growth.

You can see how EPS changes over time in the image below (click the chart to see the exact amounts).

income-per-share-growth

income-per-share-growth

We know that Seagate Technology Holdings has been pushing the bottom line recently, but will it grow revenue? Check if analysts think Seagate Technology Holdings will grow revenue in the future.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the amount of cash dividends (assuming any dividends received are reinvested) and the calculated amount of any discounted capital increases and spin-offs. . So for companies that pay a substantial dividend, the TSR is always higher than the return on share price. In the case of Seagate Technology Holdings, it has a TSR of 140% over the past 3 years. That goes beyond the price return on the part we talked about earlier. The dividends paid by the company thus increase GENERAL AN return to shareholder.

Different Perspective

While it’s certainly disappointing to see shares of Seagate Technology Holdings lose 5.8% for the full year, that’s not as bad as the market loss of 10%. Of course, long -term returns are even more important and the good news is that over five years, the stock has returned 21% annually. The business may only face a few short-term problems, but shareholders need to keep a close eye on the basics. It is always interesting to track price performance over the longer term. But to better understand Seagate Technology Holdings, we need to consider many other factors. For that purpose, you need to know 3 warning signs we found Seagate Technology Holdings.

If you want to check out another company – one with the best financial potential – then don’t forget it free list of companies that have proven they can grow profits.

Please note, the market returns quoted in this article reflect the weight of the market average return on stocks that are currently trading on the U.S. exchange.

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This article on Simply Wall St is mostly in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased approach and our articles are not intended to be financial advice. It does not contain a recommendation to buy or sell any stock, and does not take into account your goals, or your financial situation. We want to bring you long-term focused analysis driven by basic data. Note that our analysis may not be subject to the latest price-sensitive company advertisements or qualitative material. Simply Wall St does not have a position on any of the stocks mentioned.



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