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Dell Technologies (DELL) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Dell Technologies (DELL) closed at $56.80 in the latest trading session, marking a -1.03% move from the prior day. This change lagged the S&P 500's daily loss of 0.62%. Meanwhile, the Dow lost 0.25%, and the Nasdaq, a tech-heavy index, lost 0.74%.

Coming into today, shares of the computer and technology services provider had gained 5.48% in the past month. In that same time, the Computer and Technology sector gained 3.47%, while the S&P 500 gained 2.8%.

DELL will be looking to display strength as it nears its next earnings release. In that report, analysts expect DELL to post earnings of $1.46 per share. This would mark a year-over-year decline of 19.34%. Meanwhile, our latest consensus estimate is calling for revenue of $23.30 billion, up 1.55% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.36 per share and revenue of $93.64 billion. These totals would mark changes of -53.24% and +3.34%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for DELL. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.42% lower within the past month. DELL is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, DELL currently has a Forward P/E ratio of 9.03. Its industry sports an average Forward P/E of 20.24, so we one might conclude that DELL is trading at a discount comparatively.

Investors should also note that DELL has a PEG ratio of 0.75 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computers - IT Services was holding an average PEG ratio of 1.8 at yesterday's closing price.

The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 102, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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