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Western Digital (WDC) Gains But Lags Market: What You Should Know

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Western Digital (WDC) closed the most recent trading day at $66.02, moving +0.73% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.92%. Elsewhere, the Dow gained 0.51%, while the tech-heavy Nasdaq added 0.54%.

Heading into today, shares of the maker of hard drives for businesses and personal computers had gained 17.6% over the past month, outpacing the Computer and Technology sector's loss of 5.93% and the S&P 500's loss of 0.85% in that time.

Western Digital will be looking to display strength as it nears its next earnings release. On that day, Western Digital is projected to report earnings of $2.13 per share, which would represent year-over-year growth of 208.7%. Meanwhile, our latest consensus estimate is calling for revenue of $4.8 billion, up 21.79% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.72 per share and revenue of $19.58 billion. These totals would mark changes of +91.65% and +15.73%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Western Digital. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection remained stagnant. Western Digital is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Western Digital has a Forward P/E ratio of 7.52 right now. Its industry sports an average Forward P/E of 22.3, so we one might conclude that Western Digital is trading at a discount comparatively.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 105, which puts it in the top 42% 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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