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If You Invested $1000 in Seagate a Decade Ago, This is How Much It'd Be Worth Now

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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Seagate (STX) ten years ago? It may not have been easy to hold on to STX for all that time, but if you did, how much would your investment be worth today?

Seagate's Business In-Depth

With that in mind, let's take a look at Seagate's main business drivers.

Headquartered at Dublin, Ireland, Seagate is the second-largest manufacturer of hard disk drives (HDDs) in the U.S. HDDs are used as the primary medium for storing electronic information in systems ranging from desktop computers and consumer electronics to data centers delivering information over corporate networks and the Internet.

Seagate also develops other electronic data storage products such as SSD (solid state drive) and solid state hybrid drives (SSHD). The company has an industry-leading vertically-integrated operation with internal control over the majority of its key component suppliers.

The company’s HDD products are designed for mission critical and nearline applications in enterprise servers and storage systems; edge compute/clientcompute applications. SSD products mainly comprise serial attached SCSI (“SAS”) and Non-Volatile Memory Express (“NVMe”) SSDs. Cloud systems and solutions portfolio incorporates modular original equipment manufacturer (“OEM”) storage systems and scale-out storage servers.

Seagate reported revenues of $10.7 billion in fiscal 2021. The company offers its products under two heads — mass capacity storage and Legacy (which includes consumer electronics, desktop and laptop solutions). The company enhanced its position in SSDs with the acquisition of Samsung’s HDD operations and the French drive maker, LaCie. In fiscal 2021, the company shipped 535 exabytes of HDD storage capacity.

Seagate primarily sells to OEMs but supplements this with sales through distributors and retailers. Major OEM customers include Dell Inc., HP Inc, IBM and Oracle. Revenues from the OEMs accounted for 70% of fourth quarter fiscal 2021 revenues, Distributors brought in 18% and the remaining 12% came from Retailers.

The disk drive market is highly competitive and the company mainly competes with manufacturers of hard drives used in the enterprise, edge compute/client compute and edge non-compute/client non-compute applications and with other companies in the data storage industry that provide SSDs and NVMe add-in technology. Micron Technology, Western Digital Samsung Electronics and SK hynix are few of the major competitors of Seagate.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Seagate a decade ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in August 2011 would be worth $7,537.31, or a gain of 653.73%, as of August 6, 2021, and this return excludes dividends but includes price increases.

The S&P 500 rose 269.28% and the price of gold increased 4.40% over the same time frame in comparison.

Going forward, analysts are expecting more upside for STX.

Seagate’s Q4 results benefited from robust adoption of its mass capacity storage solutions driven by healthy cloud data center demand.  Recovering enterprise and video and image applications (VIA) markets augur well for its mass capacity product portfolio. The company is well-poised to gain from solid demand for 16 terabyte (TB) products along with 18 TB drives. Seagate also expects increase in uptake of its mass capacity storage solutions in the edge computing vertical, going ahead. Shares of the company have outperformed the industry in the year-to-date period. However, legacy segment is likely to bear the brunt of sluggish IT spending across small and medium enterprises, at least in the near term. Supply chain disruptions and increases in costs due to COVID-19 amid stiff competition in the disk drive market might limit margin expansion.

The stock has jumped 5.09% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 6 higher, for fiscal 2021; the consensus estimate has moved up as well.
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