Is Dell Technologies Inc (DELL) overvalued?
On Equity Rank's model estimate, DELL trades 13% above its fair value. Dell Technologies Inc (DELL) last closed at $328.53; the multi-method model fair value is $290.16.
| Price | Model fair value | Price vs model |
|---|---|---|
| $328.53 | $290.16 | 13% above |
What the answer rests on
- 3 of 8 valuation methods put DELL's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, DELL's free cash flow would need to grow about 14.2% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 147.8% a year.
- DELL trades at 21.6 times its last year's earnings, against a median of 26.1 for 34 profitable Hardware companies.
- Over the past year the price sat below the model fair value on 11% of trading days. The gap ranged from 6% below to 90% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind DELL's fair value · What prices assume · Other companies