Shares of Dell (DELL) sank in after-hours trading after the tech company reported earnings for its third quarter of Fiscal Year 2025. Earnings per share came in at $2.15, which beat analysts’ consensus estimate of $2.07. Sales increased by 9.3% year-over-year, with revenue hitting $24.37 billion. However, this missed analysts’ expectations of $24.66 billion.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Revenue was primarily driven by a 34% increase in Infrastructure Solutions Group sales of $11.4 billion, with servers and networking revenue of $7.4 billion, a 58% increase. However, Dell’s traditional PC segment dragged it down due to weaker demand and strong competition amid uncertain economic conditions.
This moderate growth in revenue is not surprising, as analysts have been expecting a bit of a slowdown in the near term. However, Morgan Stanley analyst Erik Woodring recently came out and said that although growth may not be impressive in the short term, it will likely accelerate in Calendar Year 2025.
Investor Sentiment for DELL Stock Is Currently Negative
Despite Woodring’s optimism, it seems that the sentiment among TipRanks investors is currently Negative, which is likely why investors reacted so poorly to the small revenue miss despite the solid EPS beat. Indeed, in the last seven days, 1.4% of those holding the stock decreased their positions. As a result, the stock’s sentiment is slightly below the sector average, as demonstrated in the following image:
Nevertheless, out of the 769,654 portfolios tracked by TipRanks, 1.8% hold DELL stock. In addition, the average portfolio weighting allocated towards DELL among those who do have a position is 4.67%. This suggests that most investors of the company are fairly confident about its future.
Is DELL a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DELL stock based on 15 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 95% rally in its share price over the past year, the average DELL price target of $148.84 per share implies 4.16% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
