Dell Technologies Inc. (DELL) | Investment Case

1. Company Snapshot

1.a. Company Description

Dell Technologies Inc.designs, develops, manufactures, markets, sells, and supports information technology (IT) solutions, products, and services worldwide.The company operates through three segments: Infrastructure Solutions Group (ISG), Client Solutions Group (CSG), and VMware.

The ISG segment provides traditional and next-generation storage solutions; and rack, blade, tower, and hyperscale servers.This segment also offers networking products and services that help its business customers to transform and modernize their infrastructure, mobilize and enrich end-user experiences, and accelerate business applications and processes; attached software and peripherals; and support and deployment, configuration, and extended warranty services.The CSG segment provides desktops, workstations, and notebooks; displays and projectors; attached and third-party software and peripherals, as well as support and deployment, configuration, and extended warranty services.

The VMware segment supports customers in the areas of hybrid and multi-cloud, modern applications, networking, security, and digital workspaces, helping customers to manage IT resource across private clouds and complex multi-cloud, multi-device environments.Dell Technologies Inc.also provides information security; and cloud software and infrastructure-as-a-service solutions that enable customers to migrate, run, and manage mission-critical applications in cloud-based IT environments.

The company was formerly known as Denali Holding Inc.and changed its name to Dell Technologies Inc.in August 2016.

Dell Technologies Inc.was founded in 1984 and is headquartered in Round Rock, Texas.

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1.b. Last Insights on DELL

Breaking News: Dell Technologies Inc. has seen significant developments recently. Centaurus Financial Inc. increased its stake in the company by 112.5% in Q3, now owning 16,671 shares. Meanwhile, Dell is riding a surge in AI server demand, with $64B in orders and a $43B backlog. This momentum positions its AI business for long-term growth. No recent earnings release data available. Analysts at various firms have mixed recommendations with some as buy and some as hold. Centaurus Financial Inc acquisition does not publicly give investment advice.

1.c. Company Highlights

Last Price	166.09
Change Percentage	5.95%
Open	163.5
Previous Close	156.76
Market Cap ( Millions)	111310
Volume	10479164
Year High	169.89
Year Low	66.25
M A 50	127.18
M A 200	131.24

FCF Yield	7.68%
Dividend Yield	1.26%
ROE	-218.24%
Debt / Equity	-1275.43%
Net Debt / EBIDTA	250.41%
Price To Book	-46.53
Price Earnings Ratio	19.36
Price To FCF	13.02
Price To sales	0.98
EV / EBITDA	16.46

2. Dell Technologies' Strong FY Revenue and AI-Driven Growth

Dell Technologies Inc. reported a record full-year revenue of $113.5 billion, up 19% year-over-year, with EPS of $10.30, a 27% increase. The company's Q4 revenue reached $33.4 billion, a 39% rise, with EPS of $3.89, beating estimates of $3.53. The strong financial performance was driven by its AI server business, with AI orders hitting $34.1 billion and a record backlog of $43 billion. The company generated over $11 billion in cash and returned $7.5 billion to shareholders.

Publication Date: Mar -04

                                    📋 Highlights
                                    Record Full-Year Revenue:
                                                reached $113.5 billion (up 19%) and EPS of $10.30 (up 27%), with $11B+ cash generated.
Q4 Surge:
                                                saw revenue jump to $33.4 billion (+39%) and EPS of $3.89 (+45%), driven by AI and server demand.
AI Growth:
                                                hit $34.1B in orders, $9.5B in AI server revenue, and a $43B backlog, with 2027 AI revenue expected to double.
Shareholder Returns:
                                                totaled $7.5B, including a 20% dividend raise to $2.52/share and $10B share buyback expansion.
2027 Guidance:
                                                targets $138–142B revenue (+23% midpoint) and $12.90 EPS (+25%), with Q1 revenue of $34.7–35.7B (+51% midpoint).

                                

AI Server Business Growth

The company's AI server revenue was $9.5 billion, with orders growing six times over the previous year. The AI server business is growing rapidly, driven by inference driving more tokens, which in turn drive more compute capacity and intensity. The company's "AI-forward" approach is picking up, particularly in enterprises, with a diverse customer base that could lead to less severe revenue lumpiness.

Traditional Server and Storage Performance

Traditional servers grew 27%, with demand outpacing supply, and storage revenue was up 2%. The company's Dell IP portfolio grew double digits, with PowerStore and PowerMax driving growth. The business is expected to grow in FY27, contributing to profit and helping to keep gross margins stable.

Guidance and Outlook

The company expects FY 2027 revenue of $138 billion to $142 billion, up 23% at the midpoint, with AI revenue expected to grow about 100%. Diluted non-GAAP EPS is expected to be $12.90, up 25% at the midpoint. For Q1, revenue is expected to be $34.7 billion to $35.7 billion, up 51% at the midpoint, with diluted non-GAAP EPS expected to be $2.90, up 87% at the midpoint.

Valuation Metrics

With a P/E Ratio of 16.92 and an EV/EBITDA of 14.7, the company's valuation appears reasonable considering its strong growth prospects. The Dividend Yield is 1.45%, and the Free Cash Flow Yield is 8.79%, indicating a decent return for shareholders. Analysts estimate next year's revenue growth at 20.4%, which is in line with the company's guidance.

3. NewsRoom

Cramer: Dell crashed from $168 to $110 despite strong fundamentals

13:11

Source: 247wallst.com

DELL's AI Server Momentum Surges: Can It Drive Long-Term Growth?

Mar -19

Source: zacks.com

Dell Technologies Inc. $DELL Shares Acquired by Centaurus Financial Inc.

Mar -19

Source: defenseworld.net

Top Big Data Stocks for Smart Investors in a Data-Driven World

Mar -18

Source: zacks.com

Insider Selling: CRWV, DELL & FANG See +$100M in 2026 Sales

Mar -18

Source: marketbeat.com

Dell workforce shrinks by 10% for third consecutive year

Mar -18

Source: foxbusiness.com

Dell Stock Falls on Workforce Reduction Update

Mar -17

Source: gurufocus.com

Dell shrinks workforce by 11,000 in fiscal 2026 amid ongoing restructuring

Mar -17

Source: proactiveinvestors.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.47%)

6. Segments

Client Solutions Group (CSG)

Expected Growth: 12.3%

Dell Technologies' IT services and solutions segment growth is driven by increasing demand for digital transformation, cloud adoption, and growing need for cybersecurity solutions, as well as the company's strong partnerships and strategic acquisitions.

Infrastructure Solutions Group (ISG)

Expected Growth: 4.5%

Dell Technologies’ Infrastructure Solutions Group is driven by increasing demand for digital transformation, hybrid cloud adoption, and the need for modernized infrastructure to support emerging technologies like AI and IoT.

Corporate and Other

Expected Growth: 5.1%

Dell Technologies Inc.'s corporate and other operations will experience steady growth driven by increasing demand for digital transformation, cloud computing, and cybersecurity solutions, as well as strategic acquisitions and investments in emerging technologies.

7. Detailed Products

Dell EMC PowerEdge Servers

Industry-leading servers designed for business-critical applications, offering scalability, reliability, and performance.

Dell EMC Storage

A wide range of storage solutions, including all-flash, hybrid, and object storage, designed for scalability, performance, and data protection.

Dell EMC Networking

A portfolio of networking solutions, including switches, routers, and wireless access points, designed for scalability, security, and performance.

Dell Client Solutions

A range of laptops, desktops, and workstations designed for business and consumer use cases, offering performance, mobility, and security.

Dell EMC Data Protection

A suite of data protection solutions, including backup, recovery, and archiving, designed for data availability, security, and compliance.

VMware Virtualization

Industry-leading virtualization solutions, including vSphere, vSAN, and NSX, designed for server, storage, and network virtualization.

Pivotal Cloud Foundry

A cloud-native platform for building, deploying, and managing modern applications, designed for speed, agility, and scalability.

RSA Security

A suite of cybersecurity solutions, including identity, access, and threat detection, designed for security, compliance, and risk management.

8. Dell Technologies Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Dell Technologies Inc. faces moderate threat from substitutes, as customers have limited alternatives for its products and services. However, the company's focus on innovation and customer experience helps to mitigate this threat.

Bargaining Power Of Customers

Dell Technologies Inc. has a diverse customer base, which reduces the bargaining power of individual customers. The company's strong brand reputation and customer loyalty programs also help to minimize this threat.

Bargaining Power Of Suppliers

Dell Technologies Inc. has a large and diverse supplier base, which reduces the bargaining power of individual suppliers. However, the company's dependence on a few key suppliers for critical components may increase this threat.

Threat Of New Entrants

Dell Technologies Inc. operates in a highly competitive industry, but the company's strong brand reputation, established distribution channels, and significant investments in research and development create barriers to entry for new entrants.

Intensity Of Rivalry

Dell Technologies Inc. operates in a highly competitive industry, with intense rivalry among established players. The company's focus on innovation, customer experience, and operational efficiency helps to mitigate this threat, but the company must continue to innovate and adapt to changing market conditions.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	110.19%
Debt Cost	7.03%
Equity Weight	-10.19%
Equity Cost	8.57%
WACC	6.87%
Leverage	-1081.28%

11. Quality Control: Dell Technologies Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

A-Score: 5.6/10

Value: 9.0

Growth: 4.1

Quality: 4.8

Yield: 8.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

NetApp

A-Score: 5.5/10

Value: 3.4

Growth: 5.7

Quality: 7.4

Yield: 5.0

Momentum: 4.5

Volatility: 7.0

1-Year Total Return ->

Arista Networks

A-Score: 5.0/10

Value: 0.6

Growth: 9.4

Quality: 8.3

Yield: 0.0

Momentum: 8.0

Volatility: 3.7

1-Year Total Return ->

Dell Technologies

A-Score: 4.6/10

Value: 6.6

Growth: 4.0

Quality: 4.6

Yield: 4.0

Momentum: 5.0

Volatility: 3.7

1-Year Total Return ->

Western Digital

A-Score: 4.3/10

Value: 1.8

Growth: 3.4

Quality: 7.3

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

Super Micro Computer

A-Score: 3.9/10

Value: 3.6

Growth: 9.8

Quality: 5.0

Yield: 0.0

Momentum: 3.5

Volatility: 1.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.54%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.87%

Dell Technologies Inc. - US24703L2025

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on DELL

1.c. Company Highlights

Strong Momentum

Higher Yield

Average Quality

Earnings Beats

Revenues Beats

Fairly Valued

Average Growth

Average Yield

Revenues Miss

Higher Growth

Stable Momentum

Weak Momentum

Earnings Miss

2. Dell Technologies' Strong FY Revenue and AI-Driven Growth

AI Server Business Growth

Traditional Server and Storage Performance

Guidance and Outlook

Valuation Metrics

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.47%)

6. Segments

Client Solutions Group (CSG)

Expected Growth: 12.3%

Infrastructure Solutions Group (ISG)

Expected Growth: 4.5%

Corporate and Other

Expected Growth: 5.1%

7. Detailed Products

Dell EMC PowerEdge Servers

Dell EMC Storage

Dell EMC Networking

Dell Client Solutions

Dell EMC Data Protection

VMware Virtualization

Pivotal Cloud Foundry

RSA Security

8. Dell Technologies Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Dell Technologies Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

166.07$

Current Price

166.07$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA