Dell Technologies (NYSE:DELL) is scheduled to report its results for the second quarter of fiscal 2023 after the market closes on August 25. The performance of the company’s Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG) operating segments is expected to remain solid in the to-be-reported quarter.
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Despite the complex macroeconomic environment, this multinational information technology company has been focusing on disciplined cost management, which translated into improved profitability in the first quarter of fiscal 2023.
Now, let’s take a look at consensus expectations and factors that might have influenced Dell’s results.
Consensus Estimates Look Impressive
For the second quarter of 2022, the Street expects DELL to post earnings of $1.64 per share, near the higher end of Dell’s guided range of $1.55-$1.70 per share.
Further, the consensus estimate for the company’s revenues stands at $26.49 billion, closer to the low end of the $26.1 billion to $27.1 billion range guided by the company.
Interestingly, the company surpassed earnings estimates in three of the trailing four quarters.
Key Catalysts in Q2
Dell is upbeat about strong spending in the IT space, ongoing digital transformation and transition toward multi-cloud ecosystems. The company has taken several strategic initiatives to bolster its place in the multi-cloud space.
Dell’s fiscal first quarter was the fifth straight quarter in which its ISG business witnessed growth. The trend is expected to continue on the back of growing IT spending on infrastructure and rising storage demand across its portfolio.
Under the CSG segment, the company should see an uptick in commercial demand for PC units. Dell is also expected to witness robust growth in its software and peripherals segments.
According to a Gartner report, Dell’s PC shipments declined 2.8% year-over-year in the second quarter of 2022. However, the company still grabbed the top spot in the U.S. PC market based on shipments and accounted for 27.2% of the country’s PC market share.
Dell estimates backlog levels to remain high in the to-be-reported quarter, largely due to supply-chain constraints rising from semiconductor shortages and COVID-19 lockdown in China. The company could have also witnessed high component and logistics costs in the second quarter.
Is DELL a Good Stock to Buy?
Dell Technologies seems to be a good stock to grab now. As per TipRanks, the Street is highly confident about the company, which enjoys a Strong Buy consensus rating based on seven Buys and two Holds. Dell’s average price target of $60.67 signals that the stock may surge nearly 30.1% from current levels. However, shares of the company have declined 16.9% so far this year.
TipRanks data shows that financial bloggers are 91% Bullish on Dell, compared to the sector average of 66%.
Final Thoughts
Dell’s strong performance in the first quarter of Fiscal 2023 can be partly credited to the company showing some resilience to the macroeconomic challenges. Backed by a diversified business model, strong organic growth, ongoing digital transformation and rising IT spending, the company looks well-positioned to deliver another impressive quarter.
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