Dell Technologies: Analysts Bullish Ahead of Q4 Earnings
Tuesday, Feb 25, 2025 5:27 am ET
3min read As Dell Technologies (DELL) prepares to report its fourth-quarter earnings after the market closes on Wednesday, February 26, analysts remain bullish on the company's prospects. With a mean price target of $149.42, indicating an upswing of 43.9% from the prevailing price levels, the consensus opinion on Dell Technologies stock is strongly bullish, with a "Strong Buy" rating overall. Out of the 20 analysts covering the stock, 15 recommend a "Strong Buy," two advise a "Moderate Buy," and three analysts are playing it safe with a "Hold." Let's delve into the reasons behind this bullish sentiment and explore what analysts expect from Dell's upcoming earnings report.
Strong Earnings Growth and Revenue Beat Expected
Analysts expect Dell Technologies to report a profit of $2.30 per share in the fourth quarter, up 16.8% from the year-ago quarter. This projection suggests that the company is on track to maintain its strong earnings growth trajectory. Additionally, analysts anticipate revenues of $24.66 billion, representing a 10.5% increase compared to the year-ago quarter. This revenue growth projection is supported by the company's recent performance, particularly in its Infrastructure Solutions Group, which is expected to deliver record revenue of $11.71 billion, up more than 25% year-over-year.
DELL Total Revenue (FY) year-on-year growth value
| Name |
|---|
| Date |
| Total Revenue (FY) year-on-year growth value |
| Dell TechnologiesDELL |
| 20231231 |
| 1.10B |
AI and AI-optimized Servers Driving Growth
The demand for AI-optimized servers has been a significant driver for Dell's revenue growth, particularly in its Infrastructure Solutions Group. In the first quarter of fiscal 2025, AI-optimized server orders increased sequentially to $2.6 billion, shipments were up more than 100% to $1.7 billion, and backlog grew more than 30% to $3.8 billion. Analysts expect this trend to continue, with AI server revenue expected to grow in the coming quarters, despite potential near-term challenges in AI chip supply.
Analysts' Price Targets Reflect Valuation and Capital Appreciation Potential
Analysts' price targets for Dell Technologies stock reflect their assessment of the company's valuation and potential for capital appreciation. The mean price target of $149.42 indicates that analysts believe Dell Technologies is undervalued at its current price and has significant room for capital appreciation. This bullish outlook is supported by the company's strong earnings growth, revenue beat expectations, and the potential for continued growth in its AI-optimized servers and Infrastructure Solutions Group.
In conclusion, analysts' bullish sentiment on Dell Technologies ahead of its Q4 earnings report is well-founded, given the company's strong earnings growth, revenue beat expectations, and the potential for continued growth in its AI-optimized servers and Infrastructure Solutions Group. With a mean price target indicating an upswing of 43.9% from the prevailing price levels, investors should consider Dell Technologies as a promising investment opportunity in the technology sector.
