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STX — Seagate Technology

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 35.67%
Profit Margins 21.6%
Return on Equity 1787.97%
Return on Assets 24.66%
Free Float 0.22B
Dividend Yield 0.33%
Short Int % Utilisation 4.58%

2.2 Growth

Metric Value
Revenue Growth 44.1%
Free Cash Flow 1.61B
EBITDA 52.93 (Ratio)
Enterprise Value 186.0B
EV/Revenue 16.89
EV/EBITDA 52.93

Revenue growth of 44.1% places the company in a high-growth category.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 736.61%
Risk / Std Dev (Ann.)* 73.09%
1-Year Price Return* 535.55%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $973.44
52-Week Range $152.05 – $1,145.00
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2026 FY2025
Revenue Reported revenue $12.20B $9.10B
Net income Reported net income $3.18B $1.47B
Total assets Year-end reported balance $9.97B $8.02B
Shareholders’ equity Year-end reported balance $2.17B $-453.00M
Net margin Net income ÷ revenue 26.11% 16.15%
Asset turnover Revenue ÷ total assets 1.2229x 1.1339x
Equity multiplier Total assets ÷ shareholders’ equity 4.6018x -17.7108x
ROE Net margin × asset turnover × equity multiplier 146.93% -324.28%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $12.20B
Prior annual revenue $9.10B
EBIT $3.97B
Tax rate 13.73%
NOPAT = EBIT × (1 − tax rate) $3.43B
Forecast start-growth basis 15.00%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $3.43B
Add: depreciation & amortisation $276.00M
Less: capital expenditure -$569.00M
Less/(add): working-capital cash-flow movement -$159.00M
Current unlevered FCFF $2.98B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 15.00% $3.94B $317.40M -$654.35M -$182.85M $3.42B $3.18B
2 11.88% $4.41B $355.09M -$637.81M -$204.56M $3.92B $3.14B
3 8.75% $4.80B $386.16M -$591.14M -$222.46M $4.37B $3.01B
4 5.62% $5.07B $407.88M -$516.13M -$234.98M $4.72B $2.80B
5 2.50% $5.19B $418.08M -$418.08M -$240.85M $4.95B $2.53B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 2.10
Cost of equity 16.27%
Pre-tax cost of debt 6.19%
WACC 16.07%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $37.40B
Implied terminal EV / EBITDA 5.81x
Terminal value as % of enterprise value 54.77%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $14.66B
Present value of terminal value $17.75B
Indicated enterprise value $32.41B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $32.41B
Less: gross interest-bearing debt $3.86B
Add: cash and equivalents $1.70B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $30.26B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 229,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $911.52
DCF indicative value per share $132.13
Indicative value vs. market price -85.50%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:49:31.052215 UTC; latest reported fiscal period: 2026-06-30 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 644.19% 469.59%
Adjusted R² 0.22 0.24
Annualised residual volatility 62.11% 60.97%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 2.60 (7.10) 2.04 (4.93)
Size (SMB) -1.40 (-2.83) -1.55 (-2.96)
Value (HML) 0.08 (0.20) 0.49 (0.94)
Profitability (RMW) NM -1.14 (-2.60)
Investment (CMA) NM -0.38 (-0.51)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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