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

Zacks Equity Research

Western Digital (WDC) closed the most recent trading day at $55.98, moving +1.21% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.69%. Meanwhile, the Dow gained 0.65%, and the Nasdaq, a tech-heavy index, added 0.58%.

Coming into today, shares of the maker of hard drives for businesses and personal computers had gained 34.8% in the past month. In that same time, the Computer and Technology sector gained 2.27%, while the S&P 500 gained 1.36%.

Investors will be hoping for strength from WDC as it approaches its next earnings release, which is expected to be July 31, 2019. In that report, analysts expect WDC to post earnings of $0.18 per share. This would mark a year-over-year decline of 95.01%. Meanwhile, our latest consensus estimate is calling for revenue of $3.69 billion, down 27.88% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for WDC. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 33.08% lower within the past month. WDC is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that WDC has a Forward P/E ratio of 18.23 right now. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 18.23.

Also, we should mention that WDC has a PEG ratio of 9.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer- Storage Devices industry currently had an average PEG ratio of 3.13 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 173, which puts it in the bottom 33% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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