Seagate Technology stock forecast after solid FQ1 results

On Friday, Seagate Technology Holdings Plc (NASDAQ:STX) shares advanced more than 6% after announcing its most recent quarterly results. The company reported its fiscal Q1 2022 revenue and earnings before markets opened, beating the consensus for Street expectations.

The company posted FQ1 non-GAAP earnings per share of $2.35, exceeding the average for analyst expectations of $2.21. In addition, Seagate’s GAAP EPS of $2.28 was $0.19 ahead of estimates, while revenue for the quarter grew by 35.1% to $3.12 billion, surpassing estimates by $20 million.

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The data storage company also boosted its quarterly dividend per share by 4.5% to $0.70 from $0.67 previously, implying a forward yield of 3.07%.

Time to bet on STX growth

From an investment perspective, Seagate shares trade at a compelling forward P/E ratio of 9.98, making the stock an attractive option for value investors. 

Moreover, the company offers exciting growth prospects, with analysts forecasting earnings to increase by more than 40% this year, before rising at an average annual rate of 20%.

Therefore, the stock could also gain the attention of long-term growth investors. In addition, its dividend yield could attract dividend investors.

Technically, Seagate Technology shares seem to have recently completed an upward breakout from a descending channel formation. As a result, the stock has surged to retest the 100-day moving average, creating an opportunity for a pullback.

However, with shares yet to reach overbought conditions, the rally could continue for the foreseeable future. Therefore, investors could target extended gains at about $91.35, or higher at $95.62, while $82.93 and $78.35 are support levels.

It may not be too late to buy STX stock

In summary, although Seagate shares appear to be finding resistance from the 100-day MA, the stock is yet to reach overbought conditions, leaving room for more upward movements. 

As a result, given the company’s exciting growth prospects and compelling valuation multiples, it may not be too late to invest in STX shares.

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