What stock of computer equipment is a better buy?
Dell Technologies Inc. (DELL) designs, develops, manufactures, markets, sells and supports information technology solutions, products and services around the world. the Round Rock, Texas based company operates through two segments: Infrastructure Solutions Group and Client Solutions Group. By comparison, Corsair Gaming, Inc. (CRSR) in Fremont, california, designs, markets and distributes gaming and streaming peripherals, components and systems in the Americas, Europe, the Middle East and Asia-Pacific. The company offers peripherals for gamers and creators.
Despite the supply chain crisis hampering its growth, the computer hardware industry has seen significant gains. The demand for computer hardware has increased as companies reorganize their operations to work remotely. Additionally, with the resurgence of omicron-led COVID-19 cases, this need is expected to further accelerate as several companies have delayed their plans to return to the office.
In addition, in a context of rapid digital transformation, the use of Internet of Things (IoT), artificial intelligence (AI) and cloud-based products and services are expected to increase, resulting in a growing need for hardware. computer science. According to Globe News Wire, the global computer hardware market is expected to grow at a 6% CAGR across 2025. Therefore, DELL and CRSR are expected to benefit. DELL gained 0.8% in price over the past month against negative returns from CRSR.
But which of these two titles is the best buy now? Let’s find out.
On December 1, DELL announced the introduction of Dell’s Cyber Recovery Vault on the Amazon Web Services AWS Marketplace with the launch of Dell EMC PowerProtect Cyber Recovery for AWS. Through the AWS Marketplace, customers can easily purchase and deploy a Dell Remote Cyber Vault to help protect and securely isolate data from a ransomware attack. This could lead to increased demand for its solution.
On November 2, 2021, Andy Paul, CEO of CRSR, said: “Corsair remains well positioned to capitalize on the underlying secular growth trends around gaming, esports and streaming, and we intend to continue. to invest to improve our customer experience.
Recent financial results
DELL’s revenue increased 21% year-on-year to $ 28.39 billion for its fiscal third quarter, ended September 30, 2021. The company’s adjusted EBITDA increased 6% year-on-year to 3 , $ 41 billion, while its non-GAAP net income increased to $ 2.02 billion, representing an 18% year-over-year increase. In addition, its non-GAAP EPS was $ 2.37, up 17% year-on-year.
CRSR’s revenue decreased 14.4% year-on-year to $ 391.10 million for its fiscal third quarter, ended September 30, 2021. The company’s adjusted EBITDA decreased 56.6% year-on-year at $ 27.60 million, while its adjusted net income was $ 16.30. million euros, a decrease of 66.4% year-on-year. In addition, its adjusted EPS stood at $ 0.16, down 70.4% year-over-year.
Expected financial performance
Analysts expect DELL’s revenue to grow 5.2% in the current quarter and 4.9% in the next quarter. The company’s EPS is expected to grow 3% in the current year. Its EPS is expected to grow at a rate of 5.7% per year over the next five years.
In comparison, CRSR’s revenues are expected to decline 13.2% in the current quarter and 8.9% in the next quarter. Its EPS is expected to drop 15.6% in the current year. However, the company’s EPS is expected to grow at a rate of 4.8% per year over the next five years.
DELL’s turnover for the last 12 months is 53.91 times that of CRSR. DELL is also more profitable, with gross and net margins of 30.30% and 6.46%, respectively, compared to 28.07% and 6.12% for CRSR.
In addition, DELL 70.02% DEER is greater than 25.78% of CRSR.
In terms of non-GAAP forward P / E, CRSR is currently trading at 16.66x, which is 157.9% higher than DELL’s 6.46x. Additionally, CRSR’s forward EV / EBITDA ratio of 11.92x is 101.3% higher than DELL’s 5.92x.
So, DELL is relatively affordable here.
DELL has an overall rating of B, which is equivalent to a purchase in our property POWR odds system. In contrast, CRSR has an overall D rating, which translates to Sell. POWR scores are calculated by considering 118 separate factors, each factor being weighted to an optimal degree.
DELL has an A rating for the value, which is consistent with its front P / S 0.40x, which is 90.3% lower than the industry average 4.13x. However, CRSR has a B rating for value.
Additionally, DELL has a C rating for growth, which is in line with analysts’ expectations that its EPS and revenue will increase in the coming quarters. By comparison, CRSR has a D rating for growth, which is in line with analysts’ expectations that its EPS and revenue will decline in the near term.
Out of 51 stocks in the B rating Technology – Material industry, DELL is ranked # 22. By comparison, CRSR is ranked # 38.
Beyond what I stated above, we also rated stocks for quality, dynamics, stability, and sentiment. Click here to view all DELL ratings. Also get all CRSR scores here.
The computer hardware industry is expected to experience exponential growth as industry participants help facilitate new trends in work. While DELL and CRSR are both expected to win, we believe it is best to bet on DELL now due to its strong financial position, lower valuation, higher profitability and better growth prospects.
Our research shows that the chances of success increase when investing in stocks with an overall strong buy or buy rating. See all the other top rated stocks in the Technology – Hardware sector here.
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DELL shares were trading at $ 57.18 per share on Tuesday afternoon, up $ 0.58 (+ 1.02%). Year-to-date, DELL has gained 56.04%, compared to a 29.41% increase in the benchmark S&P 500 over the same period.
Nimesh Jaiswal’s a passionate interest in the analysis and interpretation of financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach he takes while advising investors in his articles. Following…