Seagate Technology (NASDAQ: STX) recently experienced a significant drop in stock price, falling 15.09% in just one week to $753.25. Despite this decline, analysts maintain a positive outlook, projecting a 52% upside to the target price of $1,142, with no downward estimate revisions during the sell-off. Seagate’s position in the market faces competition from Western Digital (WDC) and Toshiba, who also serve the hyperscaler customers that contribute to 80% of Seagate's revenue, raising concerns about concentration risk.
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The company has reported that its nearline capacity is fully allocated through 2027 with pricing already established, and fiscal 2027 earnings per share (EPS) estimates rose 31% in the last 90 days alone. Seagate's fiscal 2026 revenue reached $12.195 billion, a 34.06% increase, with free cash flow hitting a record $3.1 billion. This performance has led to a remarkable 174.44% increase in shares this year, although the stock remains about 34% below its 52-week high of $1,143.27.
Currently, Seagate has a forward earnings multiple of 26 compared to a trailing multiple of 56, indicating swift profit growth. The EPS consensus for fiscal 2027 is projected at $36.27, significantly up from $27.74 just three months earlier. The company has consistently beaten EPS estimates for five consecutive quarters, reporting $5.71 last quarter against an expected $5.09 and forecasting $7.30 for the upcoming fiscal Q1.