Western Digital Corp. (WDC)
NASDAQ:WDC
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Western Digital
(NASDAQ:WDC)
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Rating:81Outperform
Price Target:
$606.00
▲(62.68% Upside)
Action:Reiterated
Date:05/01/26
Score is driven primarily by the sharp financial rebound (profitability, free cash flow, and much lower debt) and supportive earnings guidance. Valuation is also favorable with a low P/E and high dividend yield. Offsetting factors are elevated technical overbought readings and business risk from cloud concentration and next-gen (HAMR) execution timing.
Positive Factors
Balance Sheet Repair
Material deleveraging improves financial flexibility and reduces interest and covenant risk, enabling multi-year R&D and capital return plans. A conservative debt-to-equity (~0.16) and investment-grade upgrades support durable access to capital and resilience through demand cycles.
Negative Factors
Customer Concentration
Extremely high hyperscaler concentration amplifies demand volatility and negotiating leverage risk. A downturn or procurement shift at a few cloud customers could materially depress volumes, pricing and utilization, challenging revenue stability and margin sustainability.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Repair
Material deleveraging improves financial flexibility and reduces interest and covenant risk, enabling multi-year R&D and capital return plans. A conservative debt-to-equity (~0.16) and investment-grade upgrades support durable access to capital and resilience through demand cycles.
Read all positive factors
Western Digital Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyWestern Digital (WDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$180.84B
Dividend Yield0.18%
Average Volume (3M)7.37M
Price to Earnings (P/E)7.9
Beta (1Y)2.22
Revenue Growth-18.43%
EPS Growth242.76%
CountryUS
Employees40,000
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)18.69
Shares Outstanding344,682,130
10 Day Avg. Volume6,544,500
30 Day Avg. Volume7,366,524
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)4.14
Price to Sales (P/S)2.31
P/FCF Ratio17.10
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue14.15
Enterprise Value/Gross Profit31.14
Enterprise Value/Ebitda31.25
Forecast
1Y Price Target
$521.25Price Target Upside39.93% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)9.92
Revenue Forecast (FY)$12.86B
Western Digital Business Overview & Revenue Model
Company Description
Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard d...
How the Company Makes Money
Western Digital primarily makes money by selling storage hardware and related solutions, with revenue recognized mainly from product sales. Key revenue streams include: (1) HDD revenue: sales of high-capacity HDDs, particularly for cloud and enter...
Western Digital Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: high revenue growth (+45% YoY), doubled EPS (~97% YoY), robust margin expansion (gross margin 50.5%, +1,040 bps YoY), large exabyte shipment growth (+34% YoY), strong free cash flow ($978M, 29% margin), and a clear product roadmap with improving customer qualifications and UltraSMR adoption. Key risks noted include concentration in cloud revenue (89%), ongoing HAMR qualification and ramp timing, some remaining convertible debt and SanDisk shares to monetize, and near-term R&D-driven opex increases. Overall, the positives materially outweigh the challenges.Positive Updates
Strong Revenue Growth
Revenue of $3.3 billion in fiscal Q3 2026, up 45% year over year; results (revenue, gross margin, EPS) came in above the high end of guidance.
Negative Updates
Customer/Revenue Concentration
Cloud accounts for 89% of revenue, indicating high concentration risk in hyperscalers and cloud customers which could amplify demand volatility for the company.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Revenue Growth
Revenue of $3.3 billion in fiscal Q3 2026, up 45% year over year; results (revenue, gross margin, EPS) came in above the high end of guidance.
Read all positive updates
Company Guidance
For fiscal Q4 FY2026 Western Digital guided revenue of $3.65 billion ± $100 million (range $3.55–$3.75B; midpoint ≈ +40% YoY), gross margin of 51%–52%, operating expenses of $385–$395 million, interest and other expense of ~$10 million, an effective tax rate of 16%, and non‑GAAP diluted EPS of $3.25 ± $0.15 based on a 385 million share count. Management also reiterated longer‑term metrics and roadmaps: a conviction that exabyte demand will exceed a >25% CAGR, 40 TB EPMR volume production targeted in H2 CY2026, HAMR in qualification with four customers, plans to have major customers qualified on UltraSMR by end‑CY2027 with ~60% of exabytes on UltraSMR by end of FY2027, and multi‑year LTAs extending into CY2028–CY2029.Western Digital Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
82
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.78B | 9.52B | 6.32B | 6.25B | 18.79B | 16.92B |
| Gross Profit | 5.35B | 3.69B | 1.77B | 1.39B | 5.87B | 4.52B |
| EBITDA | 5.33B | 1.94B | 243.00M | 289.00M | 3.40B | 2.46B |
| Net Income | 6.49B | 1.86B | -798.00M | -1.68B | 1.55B | 821.00M |
Balance Sheet | ||||||
| Total Assets | 15.04B | 14.00B | 24.19B | 24.55B | 26.26B | 26.13B |
| Cash, Cash Equivalents and Short-Term Investments | 3.24B | 2.47B | 1.55B | 2.02B | 2.33B | 3.37B |
| Total Debt | 1.72B | 5.08B | 7.82B | 8.47B | 7.62B | 8.72B |
| Total Liabilities | 5.37B | 8.69B | 13.37B | 13.58B | 14.04B | 15.41B |
| Stockholders Equity | 9.68B | 5.31B | 10.82B | 10.96B | 12.22B | 10.72B |
Cash Flow | ||||||
| Free Cash Flow | 2.90B | 1.28B | -781.00M | -1.22B | 773.00M | 895.00M |
| Operating Cash Flow | 3.29B | 1.69B | -294.00M | -408.00M | 1.88B | 1.90B |
| Investing Cash Flow | -388.00M | 150.00M | -27.00M | -762.00M | -1.19B | -765.00M |
| Financing Cash Flow | -4.33B | -1.61B | 187.00M | 875.00M | -1.72B | -817.00M |
Western Digital Technical Analysis
Positive
372.52
Price Trends
389.31
Positive
321.93
Positive
225.85
Positive
Market Momentum
32.70
Positive
71.67
Negative
80.63
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDC, the sentiment is Positive. The current price of 372.52 is below the 20-day moving average (MA) of 474.17, below the 50-day MA of 389.31, and above the 200-day MA of 225.85, indicating a bullish trend. The MACD of 32.70 indicates Positive momentum. The RSI at 71.67 is Negative, neither overbought nor oversold. The STOCH value of 80.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WDC.
Western Digital Risk Analysis
Western Digital disclosed 26 risk factors in its most recent earnings report. Western Digital reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Western Digital Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $180.84B | 7.94 | 91.94% | 0.18% | -18.43% | 242.76% | |
74 Outperform | $189.64B | 31.71 | 916.38% | 1.02% | 28.92% | 55.56% | |
72 Outperform | $27.42B | 14.44 | 116.57% | 1.89% | 3.04% | 9.12% | |
66 Neutral | $22.34B | 10.68 | 1135.29% | 5.09% | 5.09% | -5.05% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $22.31B | 7.04 | 18.21% | ― | 56.58% | 1.94% |
* Technology Sector Average
WDC
Western Digital
530.60
478.48
917.94%
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25.49
-0.40
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45.98%
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651.57%
SMCI
Super Micro Computer
38.19
-3.77
-8.98%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.