Dell Stock Rises On Third-Quarter Earnings Beat – Investor's Business Daily

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Dell Technologies Cl C

Dell Technologies Cl C

DELL

$2.63 4.81% 118%

IBD Stock Analysis

  • Shares appear to be forming flat base with buy point of 58.53
  • Base still needs a couple more trading days to be validated
  • Aggressive investors could buy off 50-day bounce Wednesday

Composite Rating

Industry Group Ranking

Emerging Pattern

Flat Base

* Not real-time data. All data shown was captured at 12:49PM EST on 11/24/2021.

Dell Technologies (DELL) is the IBD Stock Of The Day after the computer hardware giant delivered a better-than-expected fiscal third-quarter earnings report. Dell stock jumped on the news on Wednesday.

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The Round Rock, Texas-based company late Tuesday said it earned an adjusted $2.37 a share on sales of $28.39 billion in its third quarter ended Oct. 29. Analysts had expected Dell earnings of $2.30 a share on sales of $27.37 billion, according to FactSet. On a year-over-year basis, Dell earnings rose 17% while sales climbed 21%.

Dell benefited from broad strength across commercial PCs, servers, and storage gear, the company said in a news release.

Dell’s PC revenue jumped 35% year over year to $16.5 billion in the quarter. Its commercial PC sales surged 40% to $12.3 billion while consumer sales advanced 21% to $4.3 billion.

Dell Stock Surges

The company’s Infrastructure Solutions Group was a laggard, with sales rising just 5% to $8.4 billion. However, it was the third consecutive quarter of year-over-year revenue growth for the division. The group sells servers, storage, and networking gear.

Lastly, Dell’s VMware (VMW) business generated revenue of $3.2 billion in the quarter, up 10%. Dell spun off the VMware unit to its shareholders at the end of the quarter.

For the current quarter, Dell expects to earn an adjusted $1.95 a share on sales of $27.5 billion. That’s based on the midpoint of its guidance. Analysts had predicted Dell earnings of $1.97 a share on sales of $25.5 billion in the fiscal fourth quarter, FactSet said.

In afternoon trading on the stock market today, Dell stock surged 4.8% higher to 57.31.

Dell stock appears to be forming a flat base with a buy point of 58.53. But that potential base needs a couple more trading days to be valid. The buy point is 10 cents above the stock’s all-time high of 58.43, reached on Oct. 25.

Aggressive investors could have picked up shares when Dell stock rebounded bullishly off its 50-day moving average line on Wednesday.

Dell Gets Price-Target Hikes

At least four Wall Street analysts raised their price targets on Dell stock after the company’s earnings report. Those four have buy ratings on Dell stock.

Deutsche Bank analyst Sidney Ho reiterated his buy rating on Dell stock with a price target of 65.

“We continue to view Dell as the best way to play the current enterprise IT (information technology) spending recovery, given its leadership in many of its business segments and its broad product portfolio,” Ho said in a note to clients.

Dell stock ranks second out of 13 stocks in IBD’s Computer Hardware and Peripherals industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 81 out of 99.

Investor’s Business Daily added Dell stock to its SwingTrader watchlist on Wednesday.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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