Dell Delivers Blowout Q1 Results, Beat Expectations

Multinational Information Technology company Dell Technologies, Inc. (DELL) delivered blowout first-quarter results and beat expectations driven by strong performance across all business segments.

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Earnings grew 59% to $2.13 per share in Q1, surpassing the Street’s estimates of $1.61 per share.

Revenue for the quarter came in at $24.48 billion, up 12% from the year-ago period, and beat the consensus estimate of $23.4 billion. (See Dell Technologies stock analysis on TipRanks)

Client Solutions Group (CSG) revenue grew 20% year-over-year, including an increase of 14% in commercial revenue and 42% in consumer revenue. Under the CSG segment, XPS notebook orders increased 21% and Alienware notebooks orders grew 76%.

Infrastructure Solutions Group (ISG) revenue grew 5% year-over-year, including a 9% increase in Servers and networking, while storage growth remained flat.

VMware generated $3 billion in revenue, up 9% from the year-ago period.

Jeff Clarke, Dell’s COO, and vice-chairman said, “Looking ahead, we see technology becoming increasingly central to the global economy and society. We’re excited for the opportunities ahead and for the data-fueled future we’re creating.”

Following the Q1 results, Raymond James analyst Simon Leopold lifted the price target on the stock from $113 to $118 implying 22% upside potential to current levels.

Leopold said, “PCs were the biggest source of upside and is the primary unit affected by supply constraints. Server sales were also strong with offsets from Storage. We expect annual sales to grow at least mid-single digits helped by the macro recovery.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 8 Buys and 3 Holds. The average analyst price target of $112 implies 16% upside potential to current levels. Shares have gained 37.5% year-to-date.

Dell scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.