Surrounded by nervous, sweaty-palmed rivals, Dell ( DELL) still hasn't lost its cool. Despite a slew of disappointments on the hardware side -- from weak sales at IBM ( IBM) to soft guidance from tech wholesaler Ingram Micro ( IM) -- Dell is poised to show up the competition by delivering double-digit revenue gains when it posts first-quarter results tomorrow. Expectations for revenues of $9.5 billion imply growth of 18% from a year ago, while earnings are expected to rise to 23 cents a share, compared to 17 cents a year ago. The only question is whether its share price gains are outrunning its admittedly impressive performance. Based on Wednesday's close of $32.25, Dell trades at 32 times forward earnings for fiscal year 2004, which began in February. The stock has shot up 41% from its year-to-date low of $22.86 on Feb. 10. Dell has finally broken free of its two-year trading range of $23 to $30, notes Lehman's Dan Niles. "The technicians tell us it can head higher, but fundamentally we are struggling with a valuation of over 30 times calendar 2003 earnings and sluggish IT demand," he says in a note. Niles has an equal weight rating on the shares. Lehman doesn't do banking for Dell. "The trends in the hardware business clearly favor Dell and it's probably the best-positioned company in the world where standards matter more than the best features," says Marty Shagrin, an analyst at Victory Capital Management, which has holdings in the stock. "There's plenty of market share for them to take in both PCs and enterprise. The question just becomes one of, what do you want to pay for that earnings strength?" Victory hasn't trimmed its holdings, however, nor has it added to its position, he says. The ( SRVEX) Victory Diversified Stock fund has 2% of its assets in Dell, according to Morningstar. "We debate every day what their proper valuation should be. We're not sure if tech demand is going to get worse, but it isn't a foregone conclusion that things will be that much improved in the back half of the year," says Shagrin.