Seagate Technology Holdings plc (STX): investment thesis checklist
What a value investor writing down why they own Seagate Technology Holdings plc would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 81.0% in FY2026; between 10.6% and 81.0% over 6 filed years, median 34.3%. Does the thesis need it to stay inside that range?
- Return on equity: 146.9% in FY2026; between 56.2% and 1512.8% over 7 filed years, median 93.1%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 1.6% in FY2026; between 1.6% and 12.8% over 10 filed years, median 6.8%. Does the thesis need it to stay inside that range?
- EV to EBIT: 46.41x in FY2026; between 10.52x and 58.87x over 6 filed years, median 17.79x. Does the thesis need it to stay inside that range?
- Price to earnings: 59.00x in FY2026; between 6.67x and 65.36x over 9 filed years, median 15.02x. Does the thesis need it to stay inside that range?
- Gross margin: 45.6% in FY2026; between 18.3% and 45.6% over 10 filed years, median 28.8%. Does the thesis need it to stay inside that range?
- Operating margin: 33.6% in FY2026; between -4.6% and 33.6% over 10 filed years, median 14.1%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 0.50x in FY2026; between 0.50x and 29.53x over 7 filed years, median 2.11x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 2.7% in FY2026; between -8.8% and 2.7% over 10 filed years, median -5.0%. Does the thesis need it to stay inside that range?
- Share count change: 5.5% in FY2026; between -8.6% and 5.5% over 10 filed years, median -2.4%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Seagate Technology Holdings plc's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Debt to Equity stays at or below 2.25x
Today 1.8x. Replayed over 4 filed years, it would have broken in 3; most recently FY2022, at 52.26x (10-K, filed 2022-08-05).
Return on Invested Capital stays at or above 64.8%
Today 81%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
Dividend Rate stays at or above $2.93
Today $2.96. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which debt to equity rose above 2.25x.
- A filed year in which return on invested capital fell below 64.8%.
- A filed year in which dividend rate fell below $2.93.
4. The published tests it meets today
Of 30 tests value investors published: 5 met, 25 not met, 0 we could not complete. Counts, never a score.
Meets: Three forensic scores; Gross margin, turnover (Robert Novy-Marx); ROIC at or above WACC; High return on tangibles; Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.