How Much Should One Number Worry Seagate Technology Stock Holders?

Seagate Technology (STX) converted 34.7% of its revenue into operating profit over the last twelve months, up from 21.1% a year earlier. Investors should pay close attention to this operating margin because the stock currently trades at about 58 times earnings, compared to 21.5 for the S&P 500. A valuation that high likely assumes current margins are here to stay. What changed at Seagate to produce a jump that large.