Listen to the last minute of this morning's presentation
It was spectacular. I'll get to why in a minute.
First, it is obvious many in attendance are completely clueless when it comes to HDD. Very sad that these are the pros trying to invest other people's money.
Second, it is obvious that Hutch is being EXTREMELY conservative in their "profitability guidance". Ya gotta read between the lines and decide for yourself if it all adds up. My conclusion is the left side of the equation is intact and spectacular and stated well but it doesn't equal the right side with respect to profitability timing. But after hearing Hutch guide the idiots in the room, I now understand why they have such stupid low estimates for the FY starting Oct 1st.
Ok, now the exciting part. The CEO said they are currently "in" every Seagate drive design center! For most in the room, this means nothing. To those with half a brain (I have 3/4s), it means that Hutch has a shot at, not just the enterprise programs, but also the personal storage group stuff. This virtually assures their ascent from current 22ish% market share today to 25% in a year to 30% in two years to maybe 35% in 3 years. Do the math on that (in a growing market) and tell me where Seagate stock will be 24 months from now.
Possible, but I sort of doubt it matters. Analyst estimates are about 64mil revenue and -24cents EPS.
In this morning's presentation they said they are shipping 8mil per week so it seems likely the current quarter comes in at about 100 - 105mil ships which would mean revenue of about 60 - 63mil and EPS of maybe -15 to -25 cents.
But it doesn't matter. All that matters is the continued march toward profitability and the steady climb in market share. They actually said this morning that at the 300mil per year revenue level they would be generating ebitda of better than 60mil. So let's say its 65mil. Multiply that by 8 and you get 520, subtract 100mil of debt and you're at 420, divide by 27mil shares and you have a share price of $15. It's gonna happen.