Seagate Technology PLC Stock Buy Recommendation Reiterated (STX)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Seagate Technology (Nasdaq: STX) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • STX's very impressive revenue growth greatly exceeded the industry average of 23.4%. Since the same quarter one year prior, revenues leaped by 56.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 777.77% and other important driving factors, this stock has surged by 199.05% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • SEAGATE TECHNOLOGY PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SEAGATE TECHNOLOGY PLC increased its bottom line by earning $6.45 versus $1.10 in the prior year. This year, the market expects an improvement in earnings ($7.35 versus $6.45).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 751.3% when compared to the same quarter one year prior, rising from $119.00 million to $1,013.00 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, SEAGATE TECHNOLOGY PLC's return on equity significantly exceeds that of both the industry average and the S&P 500.

Seagate Technology Public Limited Company designs, manufactures, markets, and sells hard disk drives for enterprise storage, client compute, and client non-compute market applications worldwide. The company has a P/E ratio of 4.9, equal to the average computer hardware industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Seagate Technology has a market cap of $12.59 billion and is part of the technology sector and computer hardware industry. Shares are up 86.6% year to date as of the close of trading on Friday.

You can view the full Seagate Technology Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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