Why It's Not Too Late to Buy Shares of Dell

Dell Technologies (NYSE:DELL) released its second-quarter results last week where sales of $26.1 billion for the period ending July 31 grew 15% year over year. The company had strong results all around with product sales rising by 16% and service-related revenue increased by 12%. Dell's pre-tax profit of more than $1 billion was double the $500 million that it recorded in the prior-year period.

It's an impressive showing by the company given that chip shortages continue to impact the supply of personal computers. However, Dell expects the strong results to continue, projecting sequential revenue growth in the third quarter, with year-over-year numbers in the teens.
Longer-term, the company looks to be in even better shape as more businesses transition to the cloud. Regardless of the situation with COVID-19, Dell should continue to do well for the foreseeable future as it can do well if people are working remotely or if the economy is fully back up and running.

Year to date, shares of Dell are up 36% and have outperformed the S&P 500, which is up 19% over the same period. On a forward price-to-earnings basis, Dell is trading at a multiple of less than 12. That's a relatively low multiple for a business that is generating double-digit growth with some promising opportunities still ahead in its future.

Although the stock is trading near its 52-week high, some analysts have set price targets of more than $110 for Dell, suggesting there could still be some near-term upside for investors who buy shares of the tech company today.