Dell Technologies Stock Down 5.2% In A Day. How Confident Are You In The Stock?
Dell Technologies (DELL) stock is down 5.2% in a day. The stock looks fairly priced at the moment, though history suggests you may benefit from buying dips. Consider the following data:
- Size: Dell Technologies is a $106 Bil company with $101 Bil in revenue currently trading at $155.95.
- Fundamentals: Last 12 month revenue growth of 10.5% and operating margin of 6.8%.
- Liquidity: Has Debt to Equity ratio of 0.27 and Cash to Assets ratio of 0.09
- Valuation: Dell Technologies stock is currently trading at P/E multiple of 21.5 and P/EBIT multiple of 14.2
- Has returned (median) 109% within a year following sharp dips since 2010. See DELL Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for DELL, see Buy or Sell DELL Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and DELL drops another 20-30% to $109 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
DELL stock has fallen meaningfully recently and we currently find it fairly priced. This may feel like a caution, and there is significant risk in relying on a single stock. However, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Separately, consider what could long-term performance for your portfolio be if you combined 10% commodities, 10% gold, and 2% crypto with equities.
Below are the details, but before that, as a quick background: DELL provides infrastructure solutions, client devices, and software, supporting hybrid cloud, modern applications, networking, security, and digital workspaces through its multiple business segments.
- Dell Technologies Stock Drop Looks Sharp, But How Deep Can It Go?
- Why Did Dell Stock Drop 22%?
- Buy or Sell Dell Technologies Stock?
- Hewlett Packard Enterprise or Dell Technologies: Which Stock Has More Upside?
- Dell Technologies Stock Slides 5.2% In A Single Day, Should You Buy The Stock?
- S&P 500 Movers | Winners: ALB, KVUE, DAL | Losers: DELL, PHM, DHI
2022 Inflation Shock
- DELL stock fell 44.4% from a high of $60.77 on 9 February 2022 to $33.77 on 12 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 1 September 2023
- Since then, the stock increased to a high of $179.21 on 29 May 2024 , and currently trades at $155.95
| DELL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -44.4% | -25.4% |
| Time to Full Recovery | 324 days | 464 days |
2020 Covid Pandemic
- DELL stock fell 45.9% from a high of $26.87 on 19 February 2020 to $14.54 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 29 June 2020
| DELL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -45.9% | -33.9% |
| Time to Full Recovery | 103 days | 148 days |
2018 Correction
- DELL stock fell 35.1% from a high of $35.16 on 16 May 2019 to $22.82 on 28 August 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 13 October 2020
| DELL | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -35.1% | -19.8% |
| Time to Full Recovery | 412 days | 120 days |
Worried that DELL could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.