Western Digital Corp. (WDC)
NASDAQ:WDC
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Western Digital
(NASDAQ:WDC)
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Rating:79Outperform
Price Target:
$281.00
▼(-5.11% Downside)
Action:ReiteratedDate:02/25/26
The score is driven by strong technical momentum and a clear fundamental recovery in profitability and cash generation, reinforced by upbeat guidance and margin expansion commentary on the earnings call. Offsetting factors are valuation that is not cheap on P/E and business risks tied to cyclicality, revenue softness, and high hyperscaler concentration (plus HAMR execution timing).
Positive Factors
Cash generation recovery
Western Digital’s meaningful reversal to solid TTM operating and free cash flow provides durable funding for capex, HAMR/technology qualification, dividends and buybacks while enabling continued debt reduction. Sustained FCF strengthens resilience through storage cycles and supports strategic investments without structural reliance on external financing.
Negative Factors
Customer concentration
Extremely high hyperscaler concentration concentrates revenue risk: contract renewals, procurement slowdowns or price negotiations by a few large customers could disproportionately affect top-line and utilization. Even with LTAs, reliance on a narrow customer base amplifies cyclicality and bargaining-power risks across the storage cycle.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation recovery
Western Digital’s meaningful reversal to solid TTM operating and free cash flow provides durable funding for capex, HAMR/technology qualification, dividends and buybacks while enabling continued debt reduction. Sustained FCF strengthens resilience through storage cycles and supports strategic investments without structural reliance on external financing.
Read all positive factors
Western Digital (WDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$100.40B
Dividend Yield0.18%
Average Volume (3M)9.15M
Price to Earnings (P/E)8.8
Beta (1Y)2.15
Revenue Growth-16.35%
EPS Growth316.56%
CountryUS
Employees40,000
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)2.13
Shares Outstanding339,037,930
10 Day Avg. Volume9,214,679
30 Day Avg. Volume9,149,683
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 Cap0.95
Enterprise Value/Revenue8.88
Enterprise Value/Gross Profit20.79
Enterprise Value/Ebitda22.07
Forecast
1Y Price Target
$317.72Price Target Upside7.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
EPS Forecast (FY)8.88
Revenue Forecast (FY)$12.51B
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 generates revenue primarily through the sale of its data storage products, which include HDDs, SSDs, and other storage solutions. The company has a diversified revenue model with key streams coming from both Client Solutions and Da...
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 Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented a strong operational and financial quarter with robust revenue and EPS outperformance, substantial exabyte growth, expanding gross margins, significant free cash flow and strengthened customer contracts. Key growth drivers include rapid ePMR/UltraSMR adoption, HAMR qualification progress and high cloud demand. Principal risks noted were the still-to-ramp HAMR program (timing/execution risk), concentrated cloud exposure (89% of revenue), a small decline in consumer revenue, and remaining SanDisk shares and debt that management plans to monetize or reduce. On balance, positive metrics, margin expansion and strong cash generation materially outweigh the disclosed risks.Positive Updates
Revenue and EPS Outperformance
Revenue of $3.0 billion, up 25% year-over-year; non-GAAP diluted EPS of $2.13, up 78% year-over-year. Both revenue and EPS finished above the high end of guidance.
Negative Updates
Consumer Revenue Decline
Consumer revenue was $168 million, down 3% year-over-year, marking weakness in the small consumer segment versus strength in cloud and client.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and EPS Outperformance
Revenue of $3.0 billion, up 25% year-over-year; non-GAAP diluted EPS of $2.13, up 78% year-over-year. Both revenue and EPS finished above the high end of guidance.
Read all positive updates
Company Guidance
Western Digital guided fiscal Q3 revenue of $3.2 billion ± $100 million (midpoint ~40% YoY growth), gross margin of 47%–48% (47.5% midpoint), operating expenses of $380–$390 million, interest and other expense of ~$50 million, an effective tax rate of ~16%, and non‑GAAP diluted EPS of $2.30 ± $0.15 based on ~385 million diluted shares; management also reiterated planned HAMR ramp starting in calendar 2027, expected run‑rate CapEx of ~4%–6% of revenue, and affirmed capital returns (quarterly dividend $0.125 payable Mar 18 and ongoing repurchases under the $2 billion program).Western Digital Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.73B | 9.52B | 6.32B | 6.25B | 18.79B | 16.92B |
| Gross Profit | 4.59B | 3.69B | 1.77B | 1.39B | 5.87B | 4.52B |
| EBITDA | 4.32B | 1.94B | 243.00M | 289.00M | 3.40B | 2.46B |
| Net Income | 3.81B | 1.86B | -798.00M | -1.68B | 1.55B | 821.00M |
Balance Sheet | ||||||
| Total Assets | 15.61B | 14.00B | 24.19B | 24.55B | 26.26B | 26.13B |
| Cash, Cash Equivalents and Short-Term Investments | 1.98B | 2.47B | 1.55B | 2.02B | 2.33B | 3.37B |
| Total Debt | 4.66B | 5.08B | 7.82B | 8.47B | 7.62B | 8.72B |
| Total Liabilities | 8.27B | 8.69B | 13.37B | 13.58B | 14.04B | 15.41B |
| Stockholders Equity | 7.34B | 5.31B | 10.82B | 10.96B | 12.22B | 10.72B |
Cash Flow | ||||||
| Free Cash Flow | 2.31B | 1.28B | -781.00M | -1.22B | 773.00M | 895.00M |
| Operating Cash Flow | 2.67B | 1.69B | -294.00M | -408.00M | 1.88B | 1.90B |
| Investing Cash Flow | -101.00M | 150.00M | -27.00M | -762.00M | -1.19B | -765.00M |
| Financing Cash Flow | -2.89B | -1.61B | 187.00M | 875.00M | -1.72B | -817.00M |
Western Digital Technical Analysis
Positive
296.14
Price Trends
269.07
Positive
219.35
Positive
153.25
Positive
Market Momentum
10.16
Negative
55.73
Neutral
62.37
Neutral
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 296.14 is above the 20-day moving average (MA) of 279.25, above the 50-day MA of 269.07, and above the 200-day MA of 153.25, indicating a bullish trend. The MACD of 10.16 indicates Negative momentum. The RSI at 55.73 is Neutral, neither overbought nor oversold. The STOCH value of 62.37 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $100.40B | 8.79 | 64.18% | 0.18% | -16.35% | 316.56% | |
71 Outperform | $21.62B | 123.52 | 13.91% | ― | 13.18% | -0.92% | |
70 Outperform | $90.11B | 26.06 | -889.39% | 1.02% | 31.56% | 106.00% | |
64 Neutral | $20.82B | 14.44 | 116.57% | 1.89% | 2.64% | 4.12% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $14.41B | 10.90 | 13.33% | ― | 12.22% | -48.34% | |
57 Neutral | $17.80B | 8.26 | 1135.29% | 5.09% | 4.09% | -5.77% |
* Technology Sector Average
WDC
Western Digital
296.14
254.41
609.67%
HPQ
HP
19.46
-7.81
-28.64%
NTAP
NetApp
105.50
16.25
18.21%
STX
Seagate Tech
424.22
337.83
391.07%
SMCI
Super Micro Computer
24.05
-10.67
-30.73%
PSTG
Pure Storage
65.47
17.03
35.16%
Western Digital Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Western Digital Simplifies Capital Structure After Preferred Elimination
Positive
Feb 24, 2026
On February 24, 2026, Western Digital eliminated its Series A Convertible Perpetual Preferred Stock by filing a Certificate of Elimination in Delaware, following the mandatory conversion of all outstanding preferred shares on February 17, 2026, re...
Business Operations and Strategy
Western Digital Converts Preferred Shares, Simplifying Capital Structure
Neutral
Feb 18, 2026
Western Digital Corporation, which previously issued Series A Convertible Perpetual Preferred Stock in a private placement that closed on January 31, 2023, has exercised its option to convert this preferred equity into common stock. The move follo...
Business Operations and StrategyPrivate Placements and Financing
Western Digital Completes Redemption of 2026 Senior Notes
Positive
Feb 9, 2026
On January 5, 2026, Western Digital Corporation announced a conditional redemption of the entire outstanding principal amount of its 4.750% Senior Notes due 2026, with a formal conditional notice delivered to noteholders by the trustee on January ...
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.