Investment Thesis
Seagate demonstrates exceptional profitability with 20.9% net margins and 28.2% operating margins, coupled with strong revenue growth of 38.9% YoY and substantial earnings expansion (338.5% net income growth). However, the extreme leverage (7.63x debt-to-equity) and modest stockholders' equity of $459M create significant financial risk despite healthy free cash flow generation of $1.0B.
STX Strengths
- Exceptional net income growth of 338.5% YoY indicating strong operational execution
- Robust free cash flow of $1.0B with 19% FCF margin providing debt service capacity
- Strong revenue growth of 38.9% YoY suggesting healthy demand in storage devices market
- Healthy operating margin of 28.2% and net margin of 20.9% demonstrating pricing power
- Interest coverage ratio of 9.1x indicates adequate ability to service debt obligations
STX Risks
- Extremely high leverage with 7.63x debt-to-equity ratio and total liabilities exceeding total assets significantly
- Stockholders' equity of only $459M is dangerously low relative to $3.5B long-term debt, creating solvency concerns
- Quick ratio of 0.72x indicates potential short-term liquidity constraints if operations deteriorate
- Gross margin data unavailable, limiting visibility into cost structure and pricing sustainability
- High leverage amplifies downside risk if storage market demand weakens or competitive pressures intensify
Key Metrics to Watch
- Free cash flow sustainability and ability to reduce net debt levels
- Revenue growth trajectory and gross margin trends in upcoming quarters
- Debt-to-equity ratio movement and progress toward deleveraging
- Operating cash flow consistency and working capital management
- Storage device market demand indicators and competitive positioning
STX Financial Metrics
STX Profitability Ratios
STX Balance Sheet & Liquidity
STX 5-Year Financial Trend
5-Year Trend Summary: Seagate Technology Holdings plc's revenue has declined by 15% over the 5-year period, indicating business contraction. The most recent EPS of $-2.56 indicates the company is currently unprofitable.
STX Growth Metrics (YoY)
STX Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $2.3B | $336.0M | $1.55 |
| Q1 2026 | $2.2B | $305.0M | $1.41 |
| Q3 2025 | $1.7B | $25.0M | $0.12 |
| Q2 2025 | $1.6B | -$19.0M | $-0.09 |
| Q1 2025 | $1.5B | -$184.0M | $-0.88 |
| Q3 2024 | $1.7B | $25.0M | $0.12 |
| Q2 2024 | $1.6B | -$4.0M | $-0.02 |
| Q1 2024 | $1.5B | $29.0M | $0.14 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
STX Capital Allocation
STX SEC Filings
Access official SEC EDGAR filings for Seagate Technology Holdings plc (CIK: 0001137789)