Simply Wall St
5 min read
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Ever wondered if Dell Technologies is truly a bargain right now, or if the market might be missing something big? This breakdown is for anyone curious about what the numbers are really saying beneath the surface.
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After a stellar run over the past few years, with a 278.4% gain over five years, Dell’s stock has pulled back recently, losing 8.4% in the last week and 22.8% over the past month. Despite these declines, it is still holding onto a 5.1% gain year-to-date.
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Lately, headlines have been focused on shifts in the tech landscape, including Dell’s expanding edge computing offerings and new partnerships in the AI space. These developments have kept the company in the news and help explain some of the volatility as investors weigh long-term growth against current momentum.
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According to our checks, Dell Technologies boasts a valuation score of 6 out of 6, signaling it screens as undervalued on every metric we track. That is a rare feat and a compelling starting point for any valuation deep dive, but stick around because there is an even more insightful way to size up Dell’s true worth coming up later in this article.
Find out why Dell Technologies’s -13.5% return over the last year is lagging behind its peers.
A Discounted Cash Flow (DCF) model estimates a company’s inherent value by projecting its expected future cash flows and discounting them back to their current value. This approach helps investors determine what a company’s shares are really worth today, based on anticipated future performance.
For Dell Technologies, the most recent Free Cash Flow sits at approximately $4.6 billion. Analyst estimates guide forecasts for the next five years, after which projections are extrapolated. By 2030, the company’s Free Cash Flow is predicted to reach roughly $8.5 billion. Each year, the model applies a discount to these figures to reflect their present value, using a two-stage Free Cash Flow to Equity framework.
According to this analysis, Dell Technologies’ intrinsic value stands at $185.83 per share. This is 34.1% above the current trading price. In other words, the DCF suggests the stock is significantly undervalued based on present cash flow projections and reasonable future growth assumptions.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Dell Technologies is undervalued by 34.1%. Track this in your watchlist or portfolio, or discover 926 more undervalued stocks based on cash flows.
