Dell Technologies Inc (DELL)

Conclusion

Dell Technologies designs, builds and sells servers, storage and networking equipment, along with notebooks, desktops and workstations, and offers customer financing. At 346.31 USD on 9 November 2026, its market capitalisation is 109.2 billion USD.

The verdict is fair. The fair value band runs from 289.67 to 434.50 USD with a midpoint of 362.08 USD, giving a margin of safety of 4.6% at the current price. The discounted cash flow value is 362.08 USD per share at a discount rate of 12.05%. The stock trades at a P/E of 9.6, an EV/EBITDA of 7.2 and a free cash flow yield of 7.8%. Ten-year medians for these multiples are not available because the price history is too short. The reverse DCF implies growth of 6.35% a year, against revenue growth of 5.55% and free cash flow per share growth of 0.57% over five years.

What holds the case up: return on invested capital of 58.5% against a WACC of 10.1%, free cash flow conversion of 75.2% over the last twelve months, and seven of nine Piotroski tests passed. What would weaken it: a current ratio of 0.96, an Altman Z-score of 2.17 in the grey zone, and five-year free cash flow per share growth of only 0.57%, well below the growth the price implies.

Financial health

Green, held up by net debt to EBITDA of 1.24 and interest coverage of 10.6, while the current ratio of 0.96 and the Altman Z-score of 2.17 are only neutral. The quick ratio is 0.565, and debt to equity is not available. The Altman model was built for manufacturers, and Dell is only partly one, so its grey-zone reading is a rough guide. Insolvency risk: low, 0.96% by the estimate of the Ohlson model over one to two years. The company's liquidity is thin, but its debt service capacity looks comfortable.

Earnings quality

Green, held up by free cash flow conversion, the Piotroski score and the share count trend. Free cash flow conversion is 75.2% over the last twelve months and 111.4% over five years. The accrual ratio is -5.8%, which means cash earnings exceed reported earnings. Stock-based compensation is 0.48% of revenue, and free cash flow after it is 7.83 billion USD. The share count has fallen by 2.3% a year over five years, which points to buybacks. The Piotroski score is 7 of 9, and the Beneish M-score of -2.19 is in the unlikely range for manipulation. The company beat estimates in 7 of the last 8 quarters, with an average surprise of 15.7%. Current-year estimates rose 40.7% over 90 days, with 23 upward and no downward revisions in the last 30 days.

Profitability

Green, held up by return on invested capital and operating margin. Operating margin is 9.55% against a ten-year median of 4.43%, and net margin is 7.53% against a median of 3.79%. Gross margin is 19.8%, below its median of 22.7%. Operating margin stability is 1.27. Return on invested capital is 58.5% against a WACC of 10.1%, and the given ROIC minus WACC value is 48.3%. Return on equity is not available. The DuPont split for January 2026 shows a net margin of 5.23% and an asset turnover of 1.121. Because shareholder equity is negative, return on equity is hard to read and should not be taken at face value.

Growth

Green, held up by earnings per share growth and the revenue consistency. Revenue compounded at 3.5% over three years, 5.6% over five and 8.4% over ten. Revenue grew in 8 of the 10 comparable years. Earnings per share compounded at 38.8% over three years and 15.4% over five, and the next-year earnings estimate implies growth of 16.9%. Free cash flow per share rose 155.9% a year over three years, but only 0.6% over five and 18.3% over ten. The three-year figure reflects a recent rebound, not a steady trend.

Valuation

Yellow, because the verdict is fair and the margin of safety of 4.6% is modest. The current P/E is 9.6, EV/EBITDA is 7.2, price to free cash flow is 12.8 and price to sales is 0.72. Ten-year medians and the premium or discount to them are not available. The discounted cash flow value is 362.08 USD per share at a discount rate of 12.05%, and the fair value from historical multiples is not available. The reverse DCF implies growth of 6.35%, compared with revenue growth of 5.55% over five years and free cash flow per share growth of 0.57%. The fair value band is an order of magnitude built on fixed assumptions, not a price target. The dividend yield is 1.43%, with a payout of 18.3% of free cash flow and a forward yield of 0.68%.

Risks

A current ratio of 0.96 and a quick ratio of 0.565 leave little cushion if cash inflows slow. The Altman Z-score of 2.17 sits in the grey zone, and the gross margin of 19.8% is below its median. The reverse DCF implies 6.35% growth, above the five-year revenue growth of 5.55% and far above the five-year free cash flow per share growth of 0.57%, so the price depends on a pickup in per-share cash generation. The share price has been volatile: it was 114.44 USD in January 2026, peaked at 537.95 USD in September 2026, and stands at 346.31 USD, with a beta of 1.44. Debt to equity, the historical medians, the historical fair value and return on equity are not available. This analysis has no debt maturity schedule and no revenue by segment, so it cannot judge refinancing timing or which business drives the growth.