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Let's talk about the popular Dell Technologies Inc. (NYSE:DELL). The company's shares saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Dell Technologies’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Dell Technologies
What's the opportunity in Dell Technologies?
Good news, investors! Dell Technologies is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $121.99, but it is currently trading at US$75.94 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Dell Technologies’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What does the future of Dell Technologies look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Dell Technologies, it is expected to deliver a negative earnings growth of -7.9%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Although DELL is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to DELL, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on DELL for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
If you want to dive deeper into Dell Technologies, you'd also look into what risks it is currently facing. To help with this, we've discovered 4 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in Dell Technologies.