Seagate Technology

Methodology

Seagate's hard disk drive business faces secular decline offset by near-term data center demand, creating uncertain long-term earnings sustainability. Use normalized earnings that account for declining PC demand and mass capacity drive pricing pressure. The calculation becomes less reliable given structural headwinds from SSD substitution in most applications.

Methodology

PEG analysis is problematic for Seagate given structural volume declines in most HDD markets offset by temporary data center strength. Growth rates can be misleading during cyclical recoveries. Focus on free cash flow generation and capital returns rather than earnings growth for this secularly challenged storage company.

Methodology

Seagate offers a meaningful dividend with management committed to capital returns despite cyclical pressures. The dividend adds significant value though sustainability depends on data center demand holding. For declining technology businesses, cash generation and capital allocation discipline matter more than growth metrics.