Lenovo More Than Holding Its Own, And Built-In Expectations Seem Low

 

Shares of Lenovo (OTCPK:LNVGY) have been nothing special since my last write-up, losing about 15% of their value, underperforming not just the NASDAQ, but peers like Dell (DELL), HP (HPQ), and Hewlett Packard Enterprise (HPE) by wide margins. This underperformance comes despite the company more than holding its own in the PC space and showing improvements in its enterprise and mobile units, as well as launching a distinct, high-margin services unit.

It’s not that unusual for Lenovo to trade below what would seem like fair value, and Lenovo shares have long been climbing that “wall of worry”. Still, in this case, I think it may be excessive. Even allowing for some slowing in the business and management coming up a little short of some of their goals, it’s hard to reconcile the very weak performance that seems to be priced into the shares.

 

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Lenovo More Than Holding Its Own, And Built-In Expectations Seem Low