Dell Technologies (DELL) stock is trading down more than 20% Friday after the PC maker's appearance on the earnings calendar. While Dell exceeded top- and bottom-line expectations for its fiscal first quarter, it issued mixed guidance for its second quarter.
In the three months ended May 3, Dell's revenue increased 6% year-over-year to $22.2 billion, driven by a 42.4% jump in servers and networking revenue. The company said earnings per share (EPS) decreased 3% from the year-ago period to $1.27.
"We again demonstrated our ability to execute and deliver strong cash flow, with artificial intelligence (AI) continuing to drive new growth," Yvonne McGill, chief financial officer at Dell, said in a statement, adding that the company "generated $7.9 billion of cash flow from operations over the last 12 months."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results beat analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $21.6 billion billion and earnings of $1.26 per share.
For its fiscal second quarter, Dell anticipates earnings of $1.65 per share and revenue in the range of $23.5 billion to $24.5 billion, the company said on its conference call.
However, the Q2 outlook came in mixed compared with analysts' expectations. According to Yahoo Finance, Wall Street is expecting revenue of $23.3 billion and earnings of $1.82 per share.
"No company is better positioned than Dell to bring AI to the enterprise," said Jeff Clarke, chief operating officer of Dell, in a statement.
Is Dell stock a buy, sell or hold?
The tech stock has posted an incredible performance so far in 2024, rising more than 70% for the year to date as of this writing, even when factoring in today's selloff.
Overall, analysts remain upbeat on Dell. According to S&P Global Market Intelligence, the consensus analyst target price for the AI stock is $153.01, representing implied upside of 14% to current levels. Meanwhile, the consensus recommendation is a Buy.
UBS Global Research is one of the more bullish outfits on Dell stock following the earnings release, with analyst David Vogt maintaining a Buy rating and raising his price target to $164 from $141.
The price-target hike is "driven by stronger and more durable revenue and profit growth than previously expected," Vogt wrote in a May 31 report. "While share price upside potential is more modest over the next 12 months relative to the past 12 months, we still view Dell as a secular winner in AI servers over the next several years."
UBS' new $164 price target represents implied upside of about 22% to current levels.
Related Content
-
What Wall Street's CEOs Are Saying About Trump's TariffsWe're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
-
The Role of the U.S. Dollar in Retirement: Is It Secure?Protect your retirement from de-dollarization, because “capital always goes where it is treated best."
-
What Wall Street's CEOs Are Saying About Trump's Tariffs
We're in the thick of earnings season and corporate America has plenty to say about the Trump administration's trade policy.
-
To Stay on Track for Retirement, Consider Doing ThisWriting down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
-
How to Make Changing Interest Rates Work for Your RetirementHigher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
-
When to Sell Your StockKnowing when to sell a stock is a major decision investors must make. While there's no one correct answer, we look at some best practices here.
-
Within Five Years of Retirement? Five Things to Do NowIf you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
-
The Home Stretch: Seven Essential Steps for Pre-RetireesThe decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
-
Stock Market Today: Great Power Affairs Mesmerize MarketsThe U.S. and China are at least talking about talking about tariffs, and investors, traders and speculators are showing a little less fear.
-
Three Options for Retirees With Concentrated Stock PositionsIf a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
