'Always Bet on Michael': Dell (DELL) Stock Soars After Crushing Estimates, Analysts Say Results are Impressive

May 27, 2022 5:44 AM EDT

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Price: $46.21 -2.49%

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Shares of Dell Technologies (NYSE: DELL) are up more than 12% in premarket trading Friday after the company reported better-than-expected Q1 adjusted EPS and revenue.

The technology company reported Q1 adjusted EPS of $1.84, compared to $1.35 in the year-ago period and well above the analyst consensus of $1.40 per share. Adjusted revenue stood at $26.12 billion, up 16% YoY, beating the consensus projection of $25 billion.

Dell reported an adjusted gross margin of 22.7% in the quarter, compared to 24.2% in the same period last year. The Q1 adjusted operating margin stood at 8.2%, compared to 7.8% in the year-ago period and analyst expectations of 7.26%.

Dell ended the first quarter with remaining performance obligations, deferred revenue, and cash & investments of $42 billion, $27.4 billion, and $8.5 billion, respectively.

Evercore ISI analyst hiked the price target on DELL stock to $63.00 per share from $60.00 after “impressive” results.

“While the guide is certainly better vs. feared we think DELL is providing a fairly conservative guide for FY23 as it implies sales growth will largely be flat in H2 on a y/y basis – given an elevated backlog and continued tailwinds on the infrastructure growth, this should enable for further upside moving forward,” Amit Daryanani said in a client note.

JPMorgan analyst Samik Chatterjee says Dell’s results showed a “better-than-feared momentum.”

“We are raising our earnings estimates following the earnings print, reversing the estimate cuts we had taken heading into the print on account of supply concerns, as Dell appears to be managing the supply chain materially better, and is also reflecting higher confidence in relation to navigating the headwinds that have plagued most outlooks this earnings season,” the analyst told clients.

By Senad Karaahmetovic

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