STX, Seagate Technology Holdings PLC
We are a leading provider of data storage technology and infrastructure solutions that enable enterprises and end users to confidently store and unlock the value of their data.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- A consumer-brand business, where the durable asset is the brand and its hold on the shelf.
- Situation
- Cyclical. margins collapse repeatedly across the cycle, a single year misleads; look at normalized, through-cycle earnings and the balance sheet at the trough.
- What moves the needle
- Volume against price, and shelf position. What decides it: whether it can raise prices without losing the customer, and whether the brand still commands its margin.
- Is it a good business?
- Return on capital has run high across the record (median 29%, above 15% in 7 of 10 years). Owner earnings agree: roughly 11% of revenue reaches owners as cash, consistently. High, durable returns can mark a moat, but whether this one is real pricing power or an accounting artifact is the judgment the 10-K is for.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →52% of revenue comes from outside the United States.
- United States48%$4.4B
- Singapore41%$3.8B
- Netherlands10%$924M
- Other0%$4M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMApr 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $11.2B | $10.8B | $11.2B | $10.4B | $10.5B | $10.7B | $11.7B | $7.4B | $6.6B | $9.1B | $11.0B |
| Gross marginGross mgn | 23% | 29% | 30% | 28% | 27% | 27% | 30% | 18% | 23% | 35% | 42% |
| Operating marginOp. mgn | 4.0% | 9.8% | 14.6% | 14.3% | 12.4% | 14.0% | 16.8% | −4.6% | 6.9% | 20.8% | 28.2% |
| Net incomeNet inc. | $248M | $772M | $1.2B | $2.0B | $1.0B | $1.3B | $1.6B | ($529M) | $335M | $1.5B | $2.4B |
| EPS (diluted)EPS | $0.82 | $2.58 | $4.05 | $7.06 | $3.79 | $5.36 | $7.36 | $-2.56 | $1.58 | $6.77 | $10.43 |
| Owner earningsOwner earn. | $1.1B | $1.5B | $1.7B | $1.2B | $1.1B | $1.1B | $1.3B | $626M | $664M | $818M | $2.4B |
| ROICROIC | 9% | 26% | 29% | 35% | 29% | 31% | 37% | -8% | 12% | 50% | 65% |
| Cash & investmentsCash+inv | $1.1B | $2.5B | $1.9B | $2.2B | $1.7B | $1.2B | $615M | $786M | $1.4B | $891M | $1.1B |
| Net debt / (cash)Net debt | $3.0B | $2.5B | $3.0B | $2.1B | $2.5B | $4.0B | $5.1B | $4.7B | $4.4B | $4.2B | $3.2B |
| Dividends / shareDiv/sh | $2.41 | $1.88 | $2.49 | $2.50 | $2.54 | $2.65 | $2.72 | $2.81 | $2.76 | $2.76 | — |
| Book value / shareBVPS | $5.27 | $4.56 | $5.70 | $7.59 | $6.74 | $2.58 | $0.49 | $-5.79 | $-7.03 | $-2.09 | $4.80 |
Owner’s Scorecard
Will it survive?
- ComfortableOperating income $1.9B ÷ interest expense $321M
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- ModerateTotal debt $5.0B ÷ operating income $1.9B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash $4.2BMeaningful net debtCash $891M − debt $5.0B
Netting $891M of cash and short-term investments against $5.0B of debt leaves $4.2B owed, about 2.2× a year's operating profit, versus the gross figure above. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- TightDSO 38 + DIO 89 − DPO 99 days
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- ExceptionalNOPAT $1.8B ÷ invested capital $3.7B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- SolidOwner Earnings $818M = operating cash $1.1B − capex $265M
What an owner could take out without starving the business. That's 9% of revenue. Treating stock comp as the real expense it is (less $200M of SBC) leaves $618M. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Mostly cash-backedCash from ops $1.1B ÷ net income $1.5B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns about halfDividends + buybacks $600M ÷ Owner Earnings $818M
Of $818M Owner Earnings, $600M (73%) went back to shareholders, $600M dividends, $0 buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.06×MaintainingCapex $265M ÷ depreciation $251M
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 9 of 10
Lost money in 1 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 7 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 4% (FY2016) → 21% (FY2025)
Margins widened over the record, pricing power intact or improving.
- Reinvestment, incremental ROIC returns capital
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Owner earnings growth −6%/yr
Free cash to owners shrank about 6% a year over the record.
- Worst year 2023 · −4.6% op. margin
Operations went underwater in 2023, understand why before trusting the good years.
- Share count −3.6%/yr
The share count is shrinking, buybacks are quietly growing your slice of the business.
- Dividend record paid
Paid a dividend in 10 of the years on record.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2016–2025
Over the record, the business generated $15.4B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a mature cash machine, most of what it earns goes straight back to owners.
- Reinvested$4.3B · 28%
- Dividends$6.4B · 42%
- Buybacks$8.0B · 52%
It reinvested $4.3B (28%) back into the business and returned $14.4B (93%) to owners, $6.4B in dividends, $8.0B in buybacks. Total debt rose $187M across the span. It returned and reinvested more than it generated, the gap was covered by debt or existing cash.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- Stock-based compensation$200M
The slice of the business handed to employees in shares this year, 2% of revenue, equal to 11% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
2 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $9.1B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.38×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $5.0B vs $1.0B WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability NearA profit every year (10-yr record) · 1 loss year
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −42%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $6.77/share and book value $-2.09/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what Seagate Technology Holdings PLC has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $2.4B on 228M diluted shares; net debt $3.2B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationRisk Factors
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“In fiscal year 2025, one customer accounted for approximately 10 % of consolidated revenue.”
From the recordRevenue exposed (TTM)$11.0B - Pricing power & competitionBusiness
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“Generally, the drive manufacturer that introduces a new product first benefits from improved product mix, favorable profit margins and less pricing pressure until comparable products are introduced.”
From the recordOperating margin28.2% (TTM), near a 10-yr high - Supplier & input dependenceBusiness
A choke point upstream. A sole or limited supplier can dictate terms, and a single shortage can stop the line.
“Vertically integrated disk drive manufacturers like us, who manufacture their own components, are less dependent on external component suppliers than less vertically integrated disk drive manufacturers.”
From the recordGross-margin cushion (TTM)42% - Debt terms & refinancingRisk Factors
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“As of June 27, 2025, the New Credit Agreement includes one financial covenant, net leverage ratio.”
From the recordBalance sheet (TTM)$4.2B meaningful net debt · interest covered 5.9× - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“On February 18, 2020, Seagate Technology LLC and certain of its affiliates, (collectively, the "Seagate Entities") filed a complaint alleging violations of federal and state antitrust laws as well as breach of contract in the U.S.”
A judgment, not a number, weigh it against the filing yourself. - Cyclicality & demandBusiness
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“Our mass capacity markets are subject to variability of sales, which can be attributed to the timing of IT spending or a reflection of cyclical demand from CSPs based on the timing of their procurement and deployment requirements and their ability to procure other components needed to build out data…”
From the recordWorst year on record−4.6% operating margin (FY2023) - Regulation & policyRisk Factors
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“The cost of the capped call transactions was $ 95 million, which met certain accounting criteria to be accounted under Additional Paid-in Capital as part of the Shareholders' Deficit and are not accounted as derivatives in the Company's Consolidated Balance Sheets. 2025 Notes On January 2, 2025, the…”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 27, 2025 and June 28, 2024, the related consolidated statements of operations, comprehensive income (loss), share…”
- “The New Credit Agreement also contains a financial covenant that requires the Company to maintain a total net leverage ratio of less than or equal to 6.75 to 1.00 , commencing with the fiscal quarter ended June 27, 2025 and declining over time so that the maximum permitted net leverage ratio for eac…”
- “Identifying the complete population of sales incentive programs and auditing management's corresponding estimates involved in determining the final selling prices for expected future reductions was complex, as it required testing subjective assumptions about the extent of price adjustments on produc…”
- “We recorded $38 million of restructuring charges in fiscal year 2025, of which $13 million was recorded to Cost of revenue and $25 million recorded to Restructuring and other, net, respectively, primarily related to an inventory write down due to a discontinued product line, employee related termina…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Computer hardware
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| HPQHP Inc. | $55.3B | 21% | 5.7% | 53% | 5% |
| HPEHewlett Packard Enterprise Company | $34.3B | 59% | -1.3% | -1% | 2% |
| SMCISuper Micro Computer, Inc. | $22.0B | 11% | 5.7% | 77% | 7% |
| WDCWestern Digital Corporation | $9.5B | 39% | 24.5% | 14% | 13% |
| PANWPalo Alto Networks, Inc | $9.2B | 73% | 13.5% | 12% | 38% |
| STXSeagate Technology Holdings PLC | $9.1B | 35% | 20.8% | 50% | 9% |
| ANETArista Networks, Inc. | $9.0B | 64% | 42.8% | 30% | 47% |
| FTNTFortinet, Inc. | $6.8B | 80% | 30.7% | — | 33% |