STX Soars 30% In A Single Month, Wait For A Dip To Buy The Stock

We believe there are only a couple of things to fear in STX stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive. Here is our multi-factor assessment.

But no matter how attractive, investing in a single stock carries high risk. Trefis High Quality Portfolio and is designed to reduce stock-specific risk while giving upside exposure

Let’s get into details of each of the assessed factors but before that, for quick background: With $47 Bil in market cap, Seagate Technology provides data storage technology and solutions globally, offering hard disk and solid-state drives, including SATA, SCSI, and NVMe products.

[1] Valuation Looks Very High

This table highlights how STX is valued vs broader market. For more details see: STX Valuation Ratios

[2] Growth Is Inconsistent

• Seagate Technology has seen its top line shrink at an average rate of -3.0% over the last 3 years
• Its revenues have grown 39% from $6.6 Bil to $9.1 Bil in the last 12 months
• Also, its quarterly revenues grew 29.5% to $2.4 Bil in the most recent quarter from $1.9 Bil a year ago.

This table highlights how STX is growing vs broader market. For more details see: STX Revenue Comparison

[3] Profitability Appears Moderate

• STX last 12 month operating income was $1.9 Bil representing operating margin of 21.1%
• With cash flow margin of 11.9%, it generated nearly $1.1 Bil in operating cash flow over this period
• For the same period, STX generated nearly $1.5 Bil in net income, suggesting net margin of about 16.1%

This table highlights how STX profitability vs broader market. For more details see: STX Operating Income Comparison

[4] Financial Stability Looks Very Strong

• STX Debt was $5.0 Bil at the end of the most recent quarter, while its current Market Cap is $47 Bil. This implies Debt-to-Equity Ratio of 10.7%
• STX Cash (including cash equivalents) makes up $891 Mil of $8.0 Bil in total Assets. This yields a Cash-to-Assets Ratio of 11.1%

[4] Downturn Resilience Is Weak

STX 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.

2022 Inflation Shock

• STX stock fell 58.2% from a high of $116.02 on 4 January 2022 to $48.49 on 3 November 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 27 May 2025
• Since then, the stock increased to a high of $229.33 on 22 September 2025 , and currently trades at $217.51

 
2020 Covid Pandemic

• STX stock fell 35.6% from a high of $63.23 on 24 January 2020 to $40.73 on 20 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 4 December 2020

 
2008 Global Financial Crisis

• STX stock fell 89.1% from a high of $28.60 on 2 November 2007 to $3.11 on 23 January 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 18 April 2012

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read STX Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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 – S&P 500, Russell, and S&P midcap. 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.