Seagate Technology PLC (NASDAQ:STX) lost over 25% share value since its disappointing Q3FY16 earning release. Weak PC macroeconomic environment and users drifting to new technology and architecture are the main reasons identified for the miss quarter.

Seagate achieved $2.6 billion in revenues with diluted EPS of $0.22 missing $0.37 Street estimate. The revenues saw a 22% YoY decline. Company HDD shipments were at a seasonal low since TAM drops in March but the trend is likely to continue in June. As PC shipments continue to decline, Seagate is likely to get the worst of it with its HDD revenues making 30% of total company revenue.

There is however a shift noted that client business is shifting to high capacity user environments such as consumer, surveillance, gaming, and DVR markets. With consumers moving into mobile and cloud-based architectures, these client revenues are likely to cannibalize the enterprise business moving from a 40:60 split to a 60:40 split in near future. Also, the average capacity per drive is likely to increase in markets.

The company shared plans of lowering HDD capacity, reworking its operational footprint and reducing capital expenditures. Management expects to lower FY16 CAPEX to around $535 million, 28% lower than FY15. Guidance for FY17 involves further cost reduction with a rather low maintenance capital plan of approximately $400 million. Also, Seagate may have to lower dividend payouts to be able to make meaningful investments.

Out of 32 analysts covering stock, 4 rate the stock a Strong Buy, 4 rate it a Buy, 10 suggest a Hold, while 3 consider it Underperform. Consensus target price is $27.84.