Dell stock forecast (2022-2025): computing a strong growth?
Dell Technologies (DELL) was created in September 2016. It’s roots can be traced to the early 1980s.
In 1984, university student Michael Dell had a vision for how technology could shape the future. In 1987, he ventured into the business of building IBM-compatible computers through the Dell Computer Corporation. By 1992, Dell was the youngest CEO to have his company listed on the Fortune 500.
While Dell had its initial public offering (IPO) in 1988, it returned to private markets in 2013. Tagged as the largest corporate privatisation in history at the time, the company cited its reasons for going private in a 2013 Securities and Exchange Commission (SEC) filing. As the markets were leaning toward smartphones and tablets, Dell felt it would serve the company best to concentrate on long-term strategies and avoid stock market volatility.
In 2018, through a reverse merger with VMware, a publicly-traded cloud computing company that Dell had acquired with its acquisition of EMC, Dell returned to the public markets.
A pioneer in customised personal computers (PCs), Dell initially concentrated on manufacturing computer hardware. It has since evolved, diversifying its product portfolio to software, data storage service and servers.
As of 11 March 2022, Dell stock last closed at $51.97, accounting for an 8.79% drop in value year-to-date – it closed at $56.98 on 3 January 2022. With the first quarter of 2022 approaching its close, join us as we undertake an analysis, look at the latest Dell stock news and gain analysts’ insights on a Dell share price forecast.
Fundamental analysis: Q4 and 2021 full year earnings
On 24 February, Dell released its fourth quarter and full year financial results. The company reported net revenues of $101.2bn for the fiscal year ended 28 January 2022 – approximately 17% higher than the previous year’s top-line of $86.7bn.
In the company’s products segment, compared to the previous fiscal year revenues of $67.7bn, growth was approximately 18% to $79.8bn. For its services segment, revenues grew almost 13%, from $18.9bn to $21.3bn.
Net income from continuing operations was reported at $4.9bn. Compared to the previous year’s $2.2bn, Dell achieved net income growth of more than 120%.
However, owing primarily to high-interest expenses of around $1.65bn, Dell reported a Q4 loss of $29m. This was in stark contrast to the company’s previous year Q4 profits of $695m. This translated to a loss per share of $0.40. In 2021, for the same time period, net income per share was $0.90.
In its financial results for fiscal year 2022, Dell confirmed its policy of paying quarterly cash dividends on common stock. It expects to pay approximately $1bn in aggregate for fiscal year 2023. The initial quarterly dividend is $0.33 a share, which would be paid on 29 April to shareholders listed in the company’s book of records as of 30 April.
Chuck Whitten, co-COO of Dell Technologies, said in his official statement:
Touted as the market leader in the technology sector, Dell also made some headway in 2022. Pursuant to providing state-of-the-art data protection to organisations against ransomware attacks, Dell launched its PowerProtect Cyber Recovery for Amazon Web Services (AWS). This aims to segregate critical organisational data and pushes the pedal on the data recovery process.
In February 2022, the company launched Alienware x14, touted as the world’s thinnest gaming laptop. The launch came alongside Dell’s new line of quantum dot OLED gaming monitors, the Alienware 34 Curved QD-OLED.
Recent market news and movements
Despite reporting strong top-line numbers, the Dell share value fell by 7.84% a day after its latest financial results were posted. On 24 February 2022, the stock closed at $55.84. It fell to $51.46 on 25 February. The primary cause for this drop was weaker than expected quarterly earnings. In Q4, Dell reported losses of $29m, equivalent to loss per share of $0.40.
In an article on investment website, The Motley Fool, Reuters confirmed that Dell’s post-earnings conference call anticipated potential challenges due to ongoing supply chain issues and a shortage of semiconductors. The website suspected this would imply weaker revenues for Dell and potentially another miss in its quarterly earnings.
On 1 November 2021, the company announced the completion of the VMware spin-off from Dell Technologies. VMware is a market leader in providing multi-cloud services and virtualises physical computers through technology innovations.
Stating reasons to improve capital structures and attract new investors, Dell sold 81% of its majority stake in VMware. While this spin-off has essentially created two standalone companies, Dell and VMware will continue to retain their commercial relationship. VMware CEO, Raghu Raghuram, spoke of the company’s outlook:
With the VMware news confirmed, Dell stock fell 3.29%, from $56.41 on 1 November to $54.61 on 2 November 2021.
Future price forecasts and analyst insights
Milan Vaishnav, CMT, MSTA, a consulting technical analyst at Gemstone Equity Research & Advisory, shared a technical analysis of the DELL share market:
Based on the data compiled by Market Beat, as of 11 March, of 16 analysts, 13 rated DELL stock a ‘buy’ and three a ‘hold’. The consensus 12-month Dell stock price target was $91.86. The Dell Technologies stock forecast price, according to Market Beat, varied from the low of $54 to the high of $130.
Algorithm-based forecasting service Wallet Investor does not offer a Dell stock analysis beyond February 2025. According to its forecast, as of 11 March 2022, the Dell stock price could reach $16.241 at the end of 2022, $0.000000946 in 2023 and to 0.000001 by the close of 2024 and until February 2025. Wallet Investor is bearish on the Dell stock value, but provides no Dell stock predictions for 2025 to 2030.
When considering whether to invest in DELL stock, you should always do your own research. A number of factors dictate whether stock prices rise or fall, including the company’s fundamentals and broader macro-economic factors. Analysts’ forecasts can be wrong. There are no guarantees. Markets are volatile. You should conduct your own analysis, taking in such things as the environment in which a company trades and your risk tolerance. Past performance is no guarantee of future results. And never invest money that you cannot afford to lose.
FAQs
Is Dell a good stock to buy?
Dell reported strong revenues in its 2021 full-year financial results. Q4 earnings reflected a loss of $29m.
Whether Dell stock is a suitable investment depends on your own investment objectives. You should conduct your own research before deciding whether Dell stock is a ‘buy’, ‘sell’ or ‘hold’. It’s important to reach your own conclusion on a company’s prospects and the likelihood of achieving analysts’ targets.
Will Dell stock price go up or down?
According to algorithm-based forecasting service Wallet Investor, the Dell stock price is expected to fall to $16.241 by December 2022. However, analysts’ forecasts can be wrong and have been inaccurate in the past. Always do your own research before investing.
Markets in this article
