To The Moon

$Seagate Technology PLC(STX)$ — Q4 FY2026 Earnings Preview on JULY 28:

Q4 FY2026 GUIDANCE:

STX guided Q4 revenue of $3.45B ±$100M (midpoint implying ~41% YoY growth), non-GAAP opex of ~$295M, non-GAAP operating margin in the lower-40% range, and non-GAAP EPS of $5.00 ±$0.20, based on a ~16% tax rate and ~231M diluted shares.

Consensus EPS estimate is $5.13 and consensus revenue estimate is $3.51B. Street is slightly above the midpoint of management's guide on both lines a mild setup for a beat.

8 KEY THINGS TO WATCH

1. Can they beat $3.45B revenue and guide even higher for FQ1 2027?

Management raised its medium and long-term revenue growth outlook to at least 20% annually and indicated nearline capacity is almost fully allocated through 2027. The real question is whether Q4 comes in above the $3.45B midpoint and whether FY2027 guidance signals continued acceleration.

2. Gross margin trajectory can they hold/expand above 47%?

Non-GAAP gross margin was 47.0% and non-GAAP operating margin was 37.5% in fiscal Q3 2026. Management guided operating margin in the "lower-40% range" for Q4 watch for whether gross margin continues expanding or plateaus as HAMR volume ramps.

3. Mozaic 4 HAMR ramp velocity

Mozaic 4 delivers up to 44TB per drive (~30% more capacity vs prior gen) and is expected to represent a majority of HAMR exabyte shipments exiting calendar 2026; Mozaic 5 targets 50TB with qualification shipments late calendar 2027. Watch the exabyte mix shift toward HAMR as a margin catalyst indicator.

4. Data center revenue share and exabyte shipments

Data center revenue hit $2.5B in Q3, up 55% YoY, accounting for 80% of total revenue, with 199 exabytes shipped mainly to cloud customers. Investors will want to see whether that 80% data center mix holds or expands heading into Q4.

5. Free cash flow can they top the $953M Q3 record?

Management expects FCF to improve further through the remainder of calendar 2026, with capex expected to stay in the 4%–6% of revenue range and net leverage continuing to decline. Q4 FCF above $1B would be a major milestone.

6. Debt reduction and balance sheet health

During fiscal Q3 2026, Seagate retired $641M of debt, reducing long-term borrowings while maintaining cash of $1.15B. Total shareholders' equity improved to $1.10B, up from a deficit at June 27, 2025. Continued deleveraging validates the structural earnings power story.

7. FY2027 outlook language

The bull case for Seagate rests on multi-year visibility, an HDD oligopoly with Western Digital, and AI capex inflating exabyte demand. Q4 is the fiscal year-end report management's FY2027 guide will be the single biggest catalyst driver post-print.

8. Insider selling overhang

June 2026 filings show heavy insider selling of roughly $108M–$113M over three months. This won't derail a strong print but will be used by bears. Watch tone on the call and whether buyback pace accelerates to offset it.

WHAT WALL STREET IS SAYING

Rosenblatt raised its price target to $1,000 (from $500) with a Buy rating the most bullish HDD call of 2026 joined by fresh target hikes from BofA, Citi, Goldman Sachs, and Barclays following the Q3 blowout.

Analyst firms including Citi, Goldman Sachs, Bank of America, Evercore ISI, and Morgan Stanley have lifted price targets and kept positive ratings.

Morgan Stanley raised its price target to $1,035 from $767 and maintained an Overweight rating.

29 Wall Street analysts cover STX, with an average price target of $891 vs. the current price of ~$1,102 implying analysts are running behind the stock after its massive run.

Bear flag: Fox Advisors downgraded STX to Equal-Weight, citing concerns that expectations for HDD pricing may be getting ahead of likely increases.

The bear case is cyclicality if hyperscaler capex normalizes or SSDs encroach on nearline workloads, today's pricing power could fade. Prudent investors should consider moderate position sizing given how much good news is already reflected in the price.