STX Stock Forecast & Price Target

Seagate Technology Holdings experienced significant growth in its mass capacity revenue, which reached $1.9 billion, representing a 9% quarter-over-quarter increase and a remarkable 79% year-over-year increase, primarily driven by strong nearline cloud demand. The company demonstrated substantial improvement in its free cash flow, which surged to $150 million with a free cash flow margin of approximately 6%, up from $27 million and a 1% margin in the previous quarter. Additionally, Seagate achieved its highest non-GAAP gross margin in a decade at 35.5%, showing an upward trend that surpassed market expectations and indicates the company's strong financial health and operational efficiency.

Seagate Technology Holdings has reported a decline in revenue within its "other business" category, reflecting weakening demand for SSDs, which raises concerns about future growth. Revenue estimates for FY25 have been revised downward, indicating significant potential underperformance compared to prior expectations and consensus estimates, suggesting challenges in maintaining market position. Additionally, macroeconomic factors such as currency fluctuations may further depress HDD demand, compounding the negative outlook for Seagate's financial health.