Once again Lenovo (OTCPK:LNVGY) (992.HK)
has delivered a better-than-expected set of quarterly financial results
and once again many sell-side analysts are reacting with “yeah, well … I
still don’t believe it”. That skepticism isn’t completely unfair, as
Lenovo has struggled for some time now to translate its strategic and
R&D decisions into real financial upside and quite a bit of the
recent outperformance has been driven by cost reductions.
I
remain in the “skeptical optimist” camp with Lenovo, and I continue to
hold a relatively small position, as I believe the company still has
leverageable brand value in PCs, not to mention an efficient product
development and manufacturing system, and long-term upside in its Data
Center Group business. I’m still looking for roughly 2% long-term
revenue growth, sub-2% FCF margins, and high single-digit FCF growth as
the company stabilizes the Mobile group and drives better results from
its PC business.
Read more here:
Two Encouraging, But Not Convincing, Quarters From Lenovo
No comments:
Post a Comment