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Western Digital (WDC) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Columbus McKinnon (CMCO) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Western Digital (WDC) closed the most recent trading day at $52.95, moving -1.84% from the previous trading session. This change lagged the S&P 500's 0.04% loss on the day. Meanwhile, the Dow lost 0.51%, and the Nasdaq, a tech-heavy index, added 0.21%.

Coming into today, shares of the maker of hard drives for businesses and personal computers had gained 18.86% in the past month. In that same time, the Computer and Technology sector gained 5.87%, while the S&P 500 gained 4.65%.

Wall Street will be looking for positivity from WDC as it approaches its next earnings report date. This is expected to be April 29, 2019. On that day, WDC is projected to report earnings of $0.49 per share, which would represent a year-over-year decline of 86.5%. Our most recent consensus estimate is calling for quarterly revenue of $3.70 billion, down 26.17% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.54 per share and revenue of $16.73 billion, which would represent changes of -62.39% and -18.99%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for WDC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% lower. WDC is currently sporting a Zacks Rank of #4 (Sell).

Investors should also note WDC's current valuation metrics, including its Forward P/E ratio of 9.73. This valuation marks a discount compared to its industry's average Forward P/E of 16.16.

We can also see that WDC currently has a PEG ratio of 0.51. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. WDC's industry had an average PEG ratio of 1.59 as of yesterday's close.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 176, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WDC in the coming trading sessions, be sure to utilize Zacks.com.


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