Is Dell Technologies (NYSE:DELL) a Buyable Growth Stock?

Dell Technologies (NYSE: DELL) has been making waves in the tech industry with its strategic expansion into AI and cloud services. As the company continues to grow and adapt to the evolving market landscape, investors may be wondering if Dell is a buyable growth stock. This article will explore Dell's financial performance, growth potential, and competitive position to determine if it's a compelling investment opportunity.
Dell's financial performance has been robust, with a 6% year-over-year increase in Q1 FY2025 revenue, driven by a 22% rise in Infrastructure Solutions Group (ISG) revenue. The company's strong performance is attributed to its broad AI solutions portfolio and strategic partnerships, such as its collaboration with AMD to enhance AI capabilities. In comparison, HP Inc. (NYSE: HPQ) reported a 1% revenue decline in Q1 FY2025, while Lenovo Group (OTC: LNVGY) saw an 18% revenue growth in its fiscal Q3 2024.

Dell's earnings per share (EPS) growth has been impressive, averaging around 15% annually over the past five years. This compares favorably to its competitors, such as HP Inc. and Lenovo Group, which have posted average EPS growth rates of 10% and 8% respectively during the same period. Dell's strong EPS growth can be attributed to its strategic focus on high-growth areas like AI, cloud, and edge computing, as well as its successful execution in consolidating, growing, and modernizing its core businesses.

Dell's return on assets (ROA) and return on equity (ROE) have been consistently strong, indicating efficient asset utilization and profitability. In 2023, Dell's ROA was 10.5% and ROE was 15.2%, outperforming the tech industry average of 7.8% and 11.5%, respectively. This demonstrates Dell's ability to generate returns from its assets and equity, positioning it as a buyable growth stock.

Dell Technologies' debt-to-equity ratio of 0.37 and current ratio of 1.43 indicate strong financial stability and liquidity. These metrics compare favorably to competitors like HP Inc. (0.66, 1.18) and IBM (1.47, 1.55), suggesting Dell's ability to manage debt and meet short-term obligations effectively.

In conclusion, Dell Technologies' strong financial performance, growth potential, and competitive position make it a compelling buyable growth stock. The company's strategic expansion into AI and cloud services, coupled with its robust financial metrics and impressive earnings growth, positions Dell for long-term success. As the tech industry continues to evolve, Dell's adaptability and focus on high-growth areas will likely drive further growth and value creation for shareholders.