Western Digital (WDC) AI Stock Analysis

• Market Cap: $31.39B
• Dividend Yield: 0.22%
• Average Volume (3M): 7.28M
• Price to Earnings (P/E): 17.8
• Beta (1Y): 2.06
• Revenue Growth: 2.12%
• EPS Growth: N/A
• Country: US
• Employees: 51,000
• Sector: Technology
• Sector Strength: 83
• Industry: Computer Hardware
• EPS (TTM): 1.66
• Shares Outstanding: 346,922,120
• 10 Day Avg. Volume: 6,445,403
• 30 Day Avg. Volume: 7,282,054
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: 1.92
• Enterprise Value/Gross Profit: 5.06
• Enterprise Value/Ebitda: 13.34
• 1Y Price Target: $87.85
• Price Target Upside: -4.55% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 74 Outperform
• Price Target: $85.00 ▼(-7.65% Downside)

Western Digital's overall stock score of 74 reflects a strong financial recovery and positive technical indicators. The company's strategic focus on AI and cloud growth, along with significant debt reduction, are major strengths. However, valuation concerns and challenges in the consumer segment temper the outlook.

Positive Factors

Capital Returns

Western Digital announced a quarterly dividend and a new $2 billion share buyback, signaling strong capital return strategies.

Revenue Growth

Western Digital's long-term growth is aligning closer to a higher growth scenario due to AI tailwinds, potentially leading to a higher revenue growth rate than expected.

Technology Roadmap

Analysts have gained more confidence in WDC's technology roadmap, dispelling views of it being a technology 'laggard'.

Negative Factors

Cash Reserves

Western Digital's cash and cash equivalents decreased to $2.11 billion from $3.48 billion in the prior quarter.

Customer Dependency

Over 90% of Western Digital's revenue comes from data center customers, indicating high dependency on a specific market segment.

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 disk drives (HDDs) and solid state drives (SSDs) for computing devices, such as desktop and notebook personal computers (PCs), smart video systems, gaming consoles, and set top boxes; flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications; and flash-based memory wafers. The company also provides data center devices and solutions comprising enterprise helium hard drives; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; data center solutions for data storage systems and tiered storage models; and data storage platforms. In addition, it offers client solutions, such as external HDD storage products in mobile and desktop form; client portable SSDs; removable cards that are used in consumer devices comprising mobile phones, tablets, imaging systems, and cameras and smart video systems; universal serial bus flash drives for use in the computing and consumer markets; and wireless drive products used in-field back up of created content, as well as wireless streaming of high-definition movies, photos, music, and documents to tablets, smartphones, and PCs. The company sells its products under the G-Technology, SanDisk, and WD brands to original equipment manufacturers, distributors, dealers, resellers, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.

How the Company Makes Money

Western Digital generates revenue primarily through the sale of its storage devices and solutions. Key revenue streams include the sale of HDDs and SSDs to original equipment manufacturers (OEMs), retailers, and directly to consumers. The company also earns revenue from data center solutions, which include enterprise-grade storage systems and cloud storage products. Significant partnerships with major technology companies and cloud service providers contribute to its earnings by ensuring a steady demand for its storage solutions. Additionally, Western Digital invests in research and development to innovate and enhance its product offerings, which helps maintain its competitive edge and drive sales growth.

Western Digital Financial Statement Overview

Summary

Western Digital demonstrates a significant turnaround in its financial performance in TTM, with improved revenue growth, profitability, and cash flow. The company has managed to stabilize its balance sheet, although past volatility and leverage levels are considerations. Overall, Western Digital's financial statements reflect a strong recovery trajectory, yet caution is warranted given historical fluctuations.

Income Statement

Western Digital's income statement shows a strong recovery in TTM with a revenue growth rate of 2.12% from the previous year and a significant improvement in profitability, evidenced by a gross profit margin of 38.0% and a net profit margin of 14.16%, compared to negative figures in prior periods. The EBIT margin of 22.85% and EBITDA margin of 24.53% in TTM further highlight the company's return to operational efficiency and profitability. However, past volatility and negative margins remain a concern.

Balance Sheet

The balance sheet indicates a moderate risk with a debt-to-equity ratio of 0.89 in TTM, showing a manageable level of leverage. The return on equity has improved to 35.40% in TTM, reflecting better profitability. However, the equity ratio is 37.92%, suggesting a dependency on liabilities to finance assets. Historical fluctuations in equity and liabilities raise concerns about financial stability.

Cash Flow

Western Digital's cash flow statement shows a strong recovery in TTM with positive free cash flow growth and an operating cash flow to net income ratio of 0.90, indicating strong cash generation relative to earnings. The free cash flow to net income ratio of 0.68 also supports healthy cash conversion. Prior negative cash flows underscore past operational challenges.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	13.28B	9.52B	13.00B	12.32B	18.79B	16.92B
Gross Profit	5.05B	3.69B	2.94B	1.89B	5.87B	4.52B
EBITDA	1.91B	1.91B	324.00M	-400.00M	3.60B	2.32B
Net Income	1.85B	1.64B	-798.00M	-1.71B	1.55B	821.00M
Balance Sheet
Total Assets	14.00B	14.00B	24.19B	24.55B	26.26B	26.13B
Cash, Cash Equivalents and Short-Term Investments	2.11B	2.11B	1.55B	2.02B	2.33B	3.37B
Total Debt	4.71B	4.71B	7.43B	7.07B	7.02B	8.72B
Total Liabilities	8.46B	8.46B	13.14B	12.71B	14.04B	15.41B
Stockholders Equity	5.54B	5.54B	11.05B	11.84B	12.22B	10.72B
Cash Flow
Free Cash Flow	1.28B	1.28B	-781.00M	-1.22B	773.00M	895.00M
Operating Cash Flow	1.69B	1.69B	-294.00M	-408.00M	1.88B	1.90B
Investing Cash Flow	150.00M	150.00M	-27.00M	-762.00M	-1.19B	-765.00M
Financing Cash Flow	-1.61B	-1.61B	187.00M	875.00M	-1.72B	-817.00M

Western Digital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 92.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 92.04 is above the 20-day moving average (MA) of 79.15, above the 50-day MA of 72.78, and above the 200-day MA of 53.89, indicating a bullish trend. The MACD of 4.44 indicates Negative momentum. The RSI at 82.34 is Negative, neither overbought nor oversold. The STOCH value of 95.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WDC.

Western Digital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WDC	74 Outperform	$31.39B	17.83	25.98%	0.22%	2.12%	―
NTAP	74 Outperform	$23.72B	20.58	123.00%	1.75%	3.45%	9.69%
HPQ	73 Outperform	$27.03B	10.52	84.33%	3.90%	3.11%	-3.54%
STX	72 Outperform	$39.13B	26.05	-109.27%	1.52%	38.86%	337.22%
SMCI	67 Neutral	$24.19B	24.52	17.90%	―	47.04%	-17.89%
PSTG	65 Neutral	$25.73B	194.57	10.04%	―	11.31%	-1.30%
Sector *	61 Neutral	$35.52B	8.84	-11.06%	1.87%	8.55%	-8.14%

Western Digital Corporate Events

Western Digital Appoints Kris Sennesael as New CFO

On May 6, 2025, Western Digital‘s Board of Directors appointed Kris Sennesael as Executive Vice President and Chief Financial Officer, effective May 12, 2025. Sennesael, with over 25 years of experience in finance and management in the semiconductor and technology sectors, will lead Western Digital’s global finance organization. His appointment is expected to strengthen the company’s position by balancing investment for innovation and growth with operational efficiency to create sustainable, long-term shareholder value.