Seagate Tech ( (STX) ) is experiencing volatility. Read on for a possible explanation for the stock’s unusual movement.
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Forget margin or options. Here's how the pros trade STXSeagate Technology shares are under pressure as investors focus on a sharp disappointment in free cash flow, which came in at just $27 million and raised fresh worries about the company’s working capital management. The pullback is being amplified by a classic “sell the news” reaction after a recent rally and unease over how quickly Seagate can ramp its mass-capacity products.
The stock drop comes even though Seagate beat Wall Street’s revenue and earnings forecasts, posting strong sales growth and expanding gross margins thanks to solid demand for high-capacity drives. Analysts and traders note that the disconnect between upbeat headline results and weak cash generation is driving the current downturn in sentiment toward the shares.
More about Seagate Tech
YTD Price Performance: 189.36%
Average Trading Volume: 3,968,345
Technical Sentiment Signal: Buy
Current Market Cap: $178.4B
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