Jim Cramer on Seagate: “Too Pricey”

Seagate Technology Holdings plc (NASDAQ:STX) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Cramer commented on the company’s valuation, as he remarked:

Seagate, again, too pricey, nearly 50 times next year’s earnings estimates. These are commodity companies.

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Seagate Technology Holdings plc (NASDAQ:STX) makes hard drives, solid-state drives, and storage solutions for personal, gaming, and business use. Cramer mentioned the company during the May 4 episode and said:

The storage stocks, Sandisk, Western Digital, and Seagate, being the big three, just don’t know when to quit. They’ve been on insane runs because historically, we’re used to that industry putting up okay growth with fairly inconsistent earnings. Their stocks always had very low price-to-earnings multiples because nobody pays up for that kind of business, too boom, too bust. Suddenly, though, we’re building data centers all over the place, and these are warehouses full of servers that need colossal amounts of memory and data storage. That’s changed the game.

Let me give you just one example. Seagate had episodic earnings for years. In fiscal 2023, the 12-month period that ended in June 2023, they were barely profitable, making just 19 cents in non-GAAP earnings per share. In fiscal 2024, which ended in June, 2024, they made $1.29 per share. In fiscal 2025, they made $8.10 per year. Now, Seagate’s projected to make nearly $15 this year, fiscal 2026, then around $26 next year and $38 in fiscal 2028, which ends in June 2028. They’re practically printing money because there’s not enough storage to go around, so they can raise prices with impunity.

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