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Seagate Technology (STX) reported fiscal third-quarter results that exceeded analyst expectations across key metrics, lifting shares nearly 10% higher in Wednesday trading.
The company posted quarterly earnings of $4.10 per share, compared with a $3.47 consensus forecast. Revenue totaled $3.11 billion, ahead of Wall Street’s $2.94 billion estimate, representing a 44.1% year-over-year increase.
Seagate also generated approximately $1 billion in free cash flow and delivered record margin performance. The results were attributed to continued demand for data storage capacity, which has been tightening hard disk drive availability amid AI-driven growth.
For the fourth quarter, Seagate forecast earnings per share between $4.80 and $5.20. Revenue guidance ranges from $3.4 billion to $3.6 billion, which the company said is above current Street estimates.
On pricing, Seagate reported a 6% improvement in revenue per terabyte, based on both annual and sequential comparisons.
Bank of America Securities raised its price target to $840 from $700 while keeping a Buy rating. The firm pointed to constrained HDD availability, strong artificial intelligence demand, and disciplined expense management. It also cited the shift toward heat-assisted magnetic recording (HAMR) technology as a factor lowering year-over-year production costs.
Rosenblatt Securities increased its target from $500 to $1,000 and maintained a Buy rating. JPMorgan lifted its target to $775 with an Overweight stance, while Citigroup set a $740 target and retained a Buy rating.
The consensus target now stands at $669.75 across 25 covering analysts, with 20 maintaining Buy ratings and five at Hold.
UBS offered a more cautious view, raising its target from $515 to $545 while keeping a Neutral rating, implying roughly 15% downside from current trading levels.
Nearline storage capacity commitments are described as essentially fully booked through calendar 2027. Seagate said it has been completing build-to-order agreements extending through fiscal year 2027, securing product specifications and pricing terms, which it characterized as providing forward revenue transparency.
Bank of America also projected continued expansion in pricing power, profitability margins, and cash generation through fiscal 2027, noting that six analysts have recently increased earnings forecasts for upcoming periods.
Seagate shares have gained 619% over the trailing twelve months. The stock traded at $642.62 on Wednesday, up $63.59 for the session, with volume near 6.9 million shares versus an average of 4.1 million.
On valuation, the equity trades at a price-to-earnings multiple near 72.6 and carries a debt-to-equity ratio of 7.63, metrics some analysts view as potential vulnerabilities if AI-related capital expenditures slow.
Seagate declared a quarterly dividend of $0.74 per share, with a June 24 record date and a July 7 payment date.
CEO William Mosley sold 20,000 STX shares on April 1 at an average execution price of $420.73, for an $8.4 million transaction conducted under a predetermined Rule 10b5-1 trading arrangement.
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