Dell Rallies After Beating Analyst Estimates

Key Insights

• Dell reported fiscal Q1 2023 results, easily beating analyst estimates on both earnings and revenue. 
• The market was worried about supply chain issues and PC demand, but the report indicated that Dell showed strong performance in the current environment. 
• Despite the recent rebound, Dell is valued at just 7 forward P/E. 

Dell Stock Moves Above The $50 Level

Shares of Dell gained strong upside momentum after the company released its quarterly report. The company reported revenue of $26.1 billion and adjusted earnings of $1.84 per share, beating analyst estimates on both earnings and revenue.

Dell stock has been under pressure in 2022 amid worries about weaker PC demand after the end of the acute phase of the coronavirus pandemic. The recent China’s decision to force government agencies and state-owned companies to use domestic PCs also served as a negative catalyst for Dell and other companies in the industry.

However, the first-quarter report indicated that demand remained strong. Dell managed to show good results despite supply chain issues and coronavirus lockdowns in China. Expectations for Dell’s first-quarter performance were low, so the stock managed to gain strong upside momentum and moved towards the $50 level.

What’s Next For Dell Stock?

Analysts expect that Dell will report earnings of $6.61 per share in the current fiscal year and $7.16 per share in the next fiscal year, so the stock is trading at just 7 forward P/E.

Analyst estimates have been moving lower in recent months, but this trend could change after the better-than-expected quarterly report. Despite the recent rebound, Dell remains cheaply valued, which could attract speculative traders.

At the same time, it should be noted that Dell stock is up by more than 30% from recent lows, so it may face some resistance in the upcoming trading sessions due to profit-taking.

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