Seagate Technology Stock Dropped 13% In A Week. Have You Fully Evaluated The Risk?

Seagate Technology (STX) stock is down 12.6% in 5 trading days. Already own the stock or planning to buy? You might want to re-consider based on the valuation as the stock still looks expensive. Consider the following data:

• Size: Seagate Technology is a $48 Bil company with $9.1 Bil in revenue currently trading at $224.35.
• Fundamentals: Last 12 month revenue growth of 38.9% and operating margin of 21.1%.
• Liquidity: Has Debt to Equity ratio of 0.1 and Cash to Assets ratio of 0.11
• Valuation: Seagate Technology stock is currently trading at P/E multiple of 32.8 and P/EBIT multiple of 26.3
• Has returned (median) 65.7% within a year following sharp dips since 2010. See STX Dip Buy Analysis.

While we like to buy dips if the fundamentals check out – for STX, see Buy or Sell STX Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and STX drops another 20-30% to $157 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.

STX stock has fallen meaningfully recently and we currently find it relatively expensive. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Should you buy one stock you like or build a portfolio designed to win across cycles? Our numbers show that High Quality Portfolio has turned stock-picking uncertainty into market-beating consistency. This portfolio is incorporated in asset allocation strategy of Empirical Asset Management – a Boston area wealth manager and Trefis partner – whose asset allocation framework yielded positive returns during the 2008-09 period when the S&P lost more than 40%.

Below are the details, but before that, as a quick background: STX provides data storage technology and solutions worldwide, offering hard disk drives, solid state drives, and advanced storage interfaces like SATA, SCSI, and NVMe.

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 $256.84 on 1 October 2025 , and currently trades at $224.35

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

2018 Correction

• STX stock fell 41.8% from a high of $62.11 on 18 April 2018 to $36.13 on 24 December 2018 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 23 January 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

Worried that STX 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.