Why is Lenovo So Cheap?

The consumer tech rush isn’t over.

Andrew Willis 20 August, 2021 | 4:28AM
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This summer, investors have been reminded of a future that’s more ‘outdoors’ as we, hopefully, migrate away from Netflix and back into more offline social settings.

What started with a rush on microchips to accompany those stuck at home now has speculators betting on a drop in PC demand next year. And while we agree there might be a dip, we think the market doesn’t appreciate the demand that could come about in the recovery.

Sector director, Kazunori Ito, sees demand from businesses for computers to pick up alongside solid consumer demand after 2023. Higher-end laptops will still have a place, and laptop giants like Lenovo are improving their product portfolio for growing consumer segments like PC gaming.

Well-positioned for this longer-term outlook, we see Lenovo picking up in profitability. And we remind investors that in the short term, the order backlog for PCs still remains at a record high.  

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Lenovo Group Ltd1.07 USD-2.55
Lenovo Group Ltd ADR20.93 USD0.72

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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