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Western Digital (WDC) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Western Digital (WDC) closed at $62.24, marking a +0.47% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.09%. Meanwhile, the Dow gained 0.26%, and the Nasdaq, a tech-heavy index, lost 0.17%.

Prior to today's trading, shares of the maker of hard drives for businesses and personal computers had gained 12.23% over the past month. This has outpaced the Computer and Technology sector's gain of 5.65% and the S&P 500's gain of 4.92% in that time.

Investors will be hoping for strength from WDC as it approaches its next earnings release. On that day, WDC is projected to report earnings of $0.29 per share, which would represent a year-over-year decline of 90.46%. Our most recent consensus estimate is calling for quarterly revenue of $3.90 billion, down 22.39% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.09 per share and revenue of $16.56 billion, which would represent changes of -36.16% and -0.06%, 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. WDC is currently a Zacks Rank #2 (Buy).

In terms of valuation, WDC is currently trading at a Forward P/E ratio of 20.06. Its industry sports an average Forward P/E of 20.06, so we one might conclude that WDC is trading at a no noticeable deviation comparatively.

Meanwhile, WDC's PEG ratio is currently 10.03. 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. The Computer- Storage Devices industry currently had an average PEG ratio of 3.73 as of yesterday's close.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 77, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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