Seagate Technology PLC (STX): Two Minor Concerns to Monitor

For the quarter, Seagate’s gross margin was flat quarter-over-quarter at 27.6%. Thus margins most likely have reached a peak or at minimum are close. While this is fine, Western Digital did see a 50 basis point rise to 28.2% while also seeing its market share increase. Hence this is another fundamental area of concern to monitor. Seagate investors should watch and see if margins and market share continue to rise while Seagate’s margins remain flat and its market share diminishes. This could very well be a one-time event, but with the stock trading at new highs, you must not minimize the small things, as pullbacks are much quicker to develop.

Final Thoughts

If there’s anything that we learned from Seagate Technology PLC (NASDAQ:STX)’s quarter it is that the company is not as dependent upon PCs as some would like to think. The company’s presence in both personal and cloud environments is carrying it into the next wave of performance.

While its presence in PCs remains large, and we are starting to see some concerns, the company still looks to be executing with perfection and remains one of the most shareholder-friendly companies in the market. At this point, investors should monitor the two areas of concern, and possibly take some gains off the table, but overall, I say Seagate remains a great company, at least right now.

The article 2 Concerns for this Hard Disk Drive Leader originally appeared on Fool.com and is written by Brian Nichols.

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