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Western Digital
(NASDAQ:WDC)
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Rating:78Outperform
Price Target:
$607.00
▲(62.94% Upside)
Action:Reiterated
Date:06/19/26
The score is driven primarily by a strong TTM financial rebound (profitability, free cash flow, and sharply improved leverage) and powerful bullish technical trend. It’s tempered by a higher P/E valuation and execution/cyclicality risks highlighted on the earnings call—especially cloud revenue concentration and HAMR ramp timing—despite supportive guidance and a high dividend yield.
Positive Factors
Improved Leverage
materially reduced net debt and conservative debt/equity provide lasting financial flexibility. Investment-grade upgrades and lower interest/refinancing exposure improve the company's ability to fund R&D, HAMR qualifications, capex and shareholder returns without stressing liquidity over the next several quarters.
Negative Factors
Customer Concentration
Heavy reliance on hyperscalers concentrates demand and pricing leverage in a few customers. This structural exposure raises volatility risk for revenue and margins if cloud capex shifts, and limits pricing negotiation flexibility despite LTAs, making multi-month demand predictability and long-term revenue durability more uncertain.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved Leverage
materially reduced net debt and conservative debt/equity provide lasting financial flexibility. Investment-grade upgrades and lower interest/refinancing exposure improve the company's ability to fund R&D, HAMR qualifications, capex and shareholder returns without stressing liquidity over the next several quarters.
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
$189.68B
Dividend Yield0.18%
Average Volume (3M)8.94M
Price to Earnings (P/E)29.4
Beta (1Y)2.35
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. Volume10,486,349
30 Day Avg. Volume8,944,594
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 Cap1.29
Enterprise Value/Revenue20.81
Enterprise Value/Gross Profit45.82
Enterprise Value/Ebitda32.52
Forecast
1Y Price Target
$623.17Price Target Upside67.28% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering19
EPS Forecast (FY)18.11
Revenue Forecast (FY)$17.99B
Western Digital Business Overview & Revenue Model
Company Description
Western Digital Corporation designs, manufactures, and markets a broad range of data storage devices and software solutions across the United States, China, Hong Kong, Europe, the Middle East, Africa, and the rest of Asia, serving an international...
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 | 7.54B | 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
Neutral
372.52
Price Trends
538.83
Positive
421.49
Positive
297.17
Positive
Market Momentum
7.49
Positive
46.46
Neutral
17.87
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDC, the sentiment is Neutral. The current price of 372.52 is below the 20-day moving average (MA) of 614.49, below the 50-day MA of 538.83, and above the 200-day MA of 297.17, indicating a neutral trend. The MACD of 7.49 indicates Positive momentum. The RSI at 46.46 is Neutral, neither overbought nor oversold. The STOCH value of 17.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $189.68B | 29.44 | 91.94% | 0.18% | -18.43% | 242.76% | |
75 Outperform | $32.41B | 25.72 | 114.18% | 1.89% | 5.29% | 10.66% | |
72 Outperform | $192.84B | 78.11 | 916.38% | 1.02% | 28.92% | 55.56% | |
65 Neutral | $21.75B | 8.68 | -473.44% | 5.09% | 7.20% | 4.12% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
52 Neutral | $18.22B | 13.48 | 18.21% | ― | 56.58% | 1.94% |
* Technology Sector Average
WDC
Western Digital
550.30
485.42
748.13%
HPQ
HP
23.78
-0.69
-2.83%
NTAP
NetApp
165.40
60.49
57.66%
STX
Seagate Tech
860.02
716.70
500.09%
SMCI
Super Micro Computer
28.17
-22.19
-44.06%
Western Digital Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Western Digital Announces Sandisk Share Exchange With Investors
Neutral
Jun 11, 2026
On June 11, 2026, Western Digital Corporation entered into privately negotiated exchange agreements with certain institutional investors to swap 1,038,681 shares of Sandisk Corporation common stock it holds for an undetermined number of its own co...
Business Operations and StrategyPrivate Placements and Financing
Western Digital Restructures Convertible Debt via Equity Exchange
Neutral
Jun 3, 2026
On June 2, 2026, Western Digital entered into privately negotiated exchange agreements with certain holders of its 3.00% Convertible Senior Notes due 2028, covering about $858.4 million in aggregate principal. The company agreed to pay cash equal ...
Business Operations and StrategyExecutive/Board Changes
Western Digital Adds AI-Focused Veteran to Board
Positive
May 28, 2026
Western Digital announced that on May 26, 2026, its board of directors unanimously appointed veteran technology executive Manuvir Das as a director and member of the audit committee, expanding the board to nine members, eight of whom are independe...
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.