Yahoo Finance Seagate Technology Holdings (NASDAQ:STX) delivers shareholders stellar 23% CAGR over 5 years, surging 3.9% in the last week alone
When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For example, the Seagate Technology Holdings plc (NASDAQ:STX) share price has soared 124% in the last half decade. Most would be very happy with that. In more good news, the share price has risen 17% in thirty days. But this could be related to good market conditions -- stocks in its market are up 7.2% in the last month.
Since it's been a strong week for Seagate Technology Holdings shareholders, let's have a look at trend of the longer term fundamentals.
Check out our latest analysis for Seagate Technology Holdings
Seagate Technology Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 5 years Seagate Technology Holdings saw its revenue shrink by 7.0% per year. On the other hand, the share price done the opposite, gaining 18%, compound, each year. It just goes to show tht the market is forward looking, and it's not always easy to predict the future based on past trends. Still, we are a bit cautious in this kind of situation.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Seagate Technology Holdings is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Seagate Technology Holdings in this interactive graph of future profit estimates.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Seagate Technology Holdings' TSR for the last 5 years was 177%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
It's good to see that Seagate Technology Holdings has rewarded shareholders with a total shareholder return of 60% in the last twelve months. That's including the dividend. That's better than the annualised return of 23% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Seagate Technology Holdings that you should be aware of.
We will like Seagate Technology Holdings better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
