Seagate Technology Holdings PLC (NYSE:STX) stock jumped Wednesday following strong quarterly results and raised guidance, prompting two firms to lift their price forecast to $500.
Analysts Lift Price Forecasts
Cantor Fitzgerald analyst C.J. Muse raised the price forecast to $500 from $400 following the results, maintaining an Overweight rating. The firm cited incremental gross margins of ~70% during the December quarter and an implied gross margin guide of at least 44%.
The analyst highlighted that like-for-like pricing increases in today’s tight supply-demand environment for hard disk drives, coupled with higher Heat-Assisted Magnetic Recording (HAMR) product pricing and approximately 10% annual cost reductions, are driving material margin increases.
Cantor noted calendar year 26 exabyte capacity is fully allocated, with Seagate building backlog for calendar year 2027 and customer conversations extending into calendar year 2028.
Rosenblatt Securities analyst Kevin Cassidy also raised the price forecast to $500 from $370, maintaining a Buy rating. The firm increased its valuation multiple to 25 times from 20 times non-GAAP EPS, citing expanding gross margins above 45% and operating margins above 35%.
Cassidy said the “Goldilocks” hard disk drive market is delivering steady gains, with rising revenue, expanding margins, and stronger earnings momentum.
Earnings Snapshot
Seagate reported quarterly earnings of $3.11 per share, which beat the analyst consensus estimate of $2.81. Quarterly revenue hit $2.83 billion, which beat the Street estimate of $2.73 billion and was up from revenue of $2.33 billion from the same period last year.
“Seagate’s December quarter results exceeded our expectations on both the top and bottom line, setting new records for gross margin, operating margin and non-GAAP EPS. This performance highlights our team’s strong operational execution, the durability of data center demand, and the ongoing ramp of our HAMR-based Mozaic products,” said Dave Mosley, CEO of Seagate.
On the earnings call, Mosley said the company’s nearline storage capacity is fully booked through calendar 2026, with orders for the first half of 2027 expected to open in the coming months.
He added that long-term agreements with major cloud customers provide strong demand visibility through 2027, while discussions already under way for 2028 signal that hyperscalers remain focused on securing supply as their storage needs continue to grow.
Seagate expects third quarter adjusted EPS of $3.20 to $3.60, versus the $2.96 analyst estimate, and revenue of $2.8 billion to $3 billion, versus the $2.77 billion analyst estimate.
STX Price Action: Seagate Technology Hldgs shares were up 20.10% at $446.50 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
Photo by Sundry Photography via Shutterstock
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