Seagate Technology (NASDAQ:STX) stock price rose more than 2x from $39 in 2018 end to over $80 currently, primarily due to favorable changes in its P/S multiple. During this period, the company witnessed just an 8% rise in revenue, but a substantial drop in the outstanding share count helped boost the company’s revenue per share and stock price. Further, over the same period, the S&P 500 returned around 65%, meaning that Seagate stock managed to strongly outperform the broader markets.
In our interactive dashboard, Why Seagate Technology Stock Moved: STX Stock Has Gained 109% Since 2018we break down the factors behind this move.
Seagate’s Total Revenue has grown 7.7% from $11.2 billion in FY 2018 to $12 billion on an LTM basis
- Seagate’s total revenue initially fell from $11.2 billion in FY ’18 to $10.5 billion in FY ’20, as sales volume rose slower than the drop in cost per bit of its memory products (Seagate’s fiscal year ends in June).
- However, sales gradually recovered to $10.7 billion in FY ’21, and currently stand as high as $12 billion on an LTM basis.
- While Seagate reports its business under one operating segment only, it is interesting to note that almost 50% of its sales come from Singapore, with the United States and the Netherlands making up the bulk of the rest.
- For additional details about Seagate’s revenues and comparison to peers, see Seagate Technology Revenue Comparison
Revenue per share increased 43% from $38.79 in 2018 to $55.36 currently
- Seagate’s revenue rose from $11.2 billion in 2018 to $12 billion currently, while the outstanding share count decreased at a quick rate, from 288 million in 2018 to under 220 million currently.
- Due to this, RPS has jumped from $38.79 in FY ’18 to $55.36 currently.
Price-To-Sales (P/S) multiple for Seagate Technology
- Seagate’s P/S multiple rose strongly to around 2.3x by late 2021, on the back of rising investor expectations surrounding memory products demand growth.
- However, due to the current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 1.5x.
- For additional details about the company stock returns and comparison to peers, see Seagate Technology Stock Return Comparison,
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