Dell Technologies(US:DELL) Great Wall Securities·2024-06-04 09:01Investment Rating - The report maintains a "Buy" rating for Dell, expecting the stock price to outperform the industry index by more than 15% over the next six months [27]. Core Insights - The company is expected to benefit from a recovery in commercial PC demand, with the CSG (Client Solutions Group) business projected to return to a growth trajectory [2][4]. - The strong demand for AI-optimized servers has led to a significant increase in orders, with total backlog reaching $3.8 billion [4][19]. - The overall revenue forecast for fiscal years 2025 to 2027 has been revised upward, with net profit estimates of $5.434 billion, $6.120 billion, and $7.084 billion respectively [4][9]. Financial Performance Summary - For FY2023, the company reported revenue of $102.301 billion, with a year-over-year growth rate of 1.1%. However, FY2024 is expected to see a decline of 13.6% in revenue [1]. - The net profit for FY2023 was $2.442 billion, with a significant increase projected for FY2024 to $3.211 billion, reflecting a growth rate of 31.5% [1]. - The company's EPS (Earnings Per Share) is expected to rise from $3.44 in FY2023 to $4.52 in FY2024, and further to $7.65 in FY2025 [1][4]. Business Segment Insights - The ISG (Infrastructure Solutions Group) revenue for Q1 FY2025 was $9.227 billion, showing a year-over-year increase of 22%, driven by AI-optimized server sales [9]. - The CSG revenue for the same period was $11.967 billion, remaining stable due to the recovery in commercial PC demand [9]. - The overall revenue for Q1 FY2025 was $22.244 billion, reflecting a year-over-year growth of 6.32% [18]. Market Outlook - The global traditional PC market is showing signs of recovery, with a 1.5% year-over-year increase in shipments in Q1 2024, indicating a return to pre-pandemic levels [2]. - The company anticipates a moderate recovery in the PC market due to the upcoming replacement cycle and the discontinuation of Windows 10 [2][4].