Western Digital (WDC) AI Stock Analysis

• Market Cap: $23.05B
• Dividend Yield: 0.15%
• Average Volume (3M): 6.09M
• Price to Earnings (P/E): 12.6
• Beta (1Y): 2.21
• Revenue Growth: 21.22%
• EPS Growth: N/A
• Country: US
• Employees: 51,000
• Sector: Technology
• Sector Strength: 87
• Industry: Computer Hardware
• EPS (TTM): 1.36
• Shares Outstanding: 348,878,360
• 10 Day Avg. Volume: 6,048,015
• 30 Day Avg. Volume: 6,093,674
• PEG Ratio: 0.03
• Price to Book (P/B): 1.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -9.93
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 3.21
• Enterprise Value/Ebitda: 2.29
• 1Y Price Target: $60.56
• Price Target Upside: -8.35% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19

• Rating: 63 Neutral
• Price Target: $66.00 ▼(-0.12%Downside)

Western Digital's overall stock score reflects a mix of strengths and challenges. Financial performance and valuation are positive, indicating recovery and potential undervaluation. Technical analysis shows bullish momentum but warns of overbought conditions. The earnings call and corporate events contribute positively, supporting long-term growth prospects.

Positive Factors

Capital Returns

Western Digital announced that the Board of Directors has authorized a $2bn share repurchase program effective immediately.

Stock Valuation

There is over 30% upside to the new $78 price target, indicating a favorable risk/reward ratio.

Technology Competitiveness

WDC's technology competitiveness is seen as a positive factor influencing the stock.

Negative Factors

Market Valuation

The market is underappreciating Western Digital with shares trading at a significant discount compared to its peers.

Technology Development

Western Digital is at least 12 months behind peer Seagate Technology in HAMR technology.

Western Digital Business Overview & Revenue Model

Company Description

Western Digital Corporation (WDC) is a leading global provider of data storage solutions that enable businesses and consumers to capture, preserve, access, and transform an ever-increasing diversity of data. The company operates primarily in two key sectors: Data Center Devices and Solutions, and Client Devices and Solutions. Its core products include hard disk drives (HDDs), solid state drives (SSDs), and flash storage solutions, catering to a wide range of markets, including enterprise data centers, cloud computing, personal computing, and mobile devices.

How the Company Makes Money

Western Digital makes money through the sale of its data storage products and solutions to various sectors, including enterprises, cloud service providers, and individual consumers. The company's revenue streams are primarily derived from its two main product groups: HDDs and SSDs. HDDs are a significant revenue source, serving traditional storage needs in data centers and personal computing, while SSDs and flash memory products cater to the growing demand for faster and more efficient storage solutions in enterprise and consumer electronics. Additionally, Western Digital has established strategic partnerships with major tech companies and OEMs, which help expand its market reach and drive sales. The company also invests in R&D to innovate and enhance its product offerings, maintaining competitiveness in the rapidly evolving storage technology market.

Western Digital Financial Statement Overview

Summary

Western Digital shows signs of financial recovery with improved profitability and cash flow. However, revenue decline and historical volatility in earnings pose risks. The balance sheet reflects moderate leverage, and strong ROE, but potential concerns about sustainability remain.

Income Statement

Western Digital's income statement shows a mixed performance. The TTM gross profit margin stands at 18.09%, indicating moderate profitability. The net profit margin of 15.41% is impressive compared to the previous year's negative margin, highlighting a significant improvement in profitability. However, revenue has declined by 17.90% compared to the previous year, posing a potential concern. The EBIT margin of 17.51% reflects operational efficiency, yet the EBITDA margin of 0.25% suggests limited earnings before depreciation and amortization.

Balance Sheet

The balance sheet reveals a debt-to-equity ratio of 1.42, indicating a moderate level of financial leverage. Return on equity (ROE) is strong at 31.79%, driven by recent profitability improvements, but it might not be sustainable given past negative net incomes. The equity ratio stands at 31.63%, showing a decent proportion of assets financed by equity, though lower than some peers in the industry.

Cash Flow

Cash flow analysis indicates solid performance with a free cash flow growth rate of 209.48%, reflecting improved cash generation and fiscal management. The operating cash flow to net income ratio is 0.80, suggesting strong cash earnings support. The free cash flow to net income ratio of 0.52 further demonstrates adequate cash flow relative to profitability, indicating good liquidity management.

Breakdown	TTM	Jun 2024	Jun 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	14.44B	13.00B	12.32B	18.79B	16.92B	16.74B
Gross Profit	5.33B	2.94B	1.89B	5.87B	4.52B	3.78B
EBITDA	2.92B	324.00M	-400.00M	3.60B	2.32B	1.93B
Net Income	1.64B	-798.00M	-1.71B	1.55B	821.00M	-250.00M
Balance Sheet
Total Assets	16.37B	24.19B	24.43B	26.26B	26.13B	25.66B
Cash, Cash Equivalents and Short-Term Investments	3.48B	1.88B	2.02B	2.33B	3.37B	3.05B
Total Debt	7.33B	7.43B	7.07B	7.02B	8.72B	9.57B
Total Liabilities	10.96B	13.14B	23.55B	14.04B	15.41B	16.11B
Stockholders Equity	5.41B	10.82B	10.85B	12.22B	10.72B	9.55B
Cash Flow
Free Cash Flow	854.00M	-781.00M	-1.22B	773.00M	895.00M	177.00M
Operating Cash Flow	1.31B	-294.00M	-408.00M	1.88B	1.90B	824.00M
Investing Cash Flow	162.00M	-27.00M	-762.00M	-1.19B	-765.00M	278.00M
Financing Cash Flow	111.00M	187.00M	875.00M	-1.72B	-817.00M	-1.51B

Western Digital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 66.08
• 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 66.08 is above the 20-day moving average (MA) of 59.83, above the 50-day MA of 52.26, and above the 200-day MA of 48.74, indicating a bullish trend. The MACD of 3.82 indicates Negative momentum. The RSI at 87.60 is Negative, neither overbought nor oversold. The STOCH value of 93.38 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
NTAP	79 Outperform	$21.49B	18.90	108.51%	1.94%	5.02%	22.19%
SMCI	77 Outperform	$28.98B	26.80	21.03%	―	82.10%	6.35%
PSTG	76 Outperform	$18.61B	153.20	9.76%	―	10.85%	30.85%
WDC	63 Neutral	$23.05B	12.56	28.45%	0.15%	21.22%	―
Sector *	63 Neutral	$34.07B	6.13	-11.73%	1.80%	5.33%	-18.31%
HPQ	61 Neutral	$24.42B	10.02	84.33%	4.45%	2.08%	-12.41%
STX	61 Neutral	$31.71B	21.59	-109.27%	1.93%	36.29%	―

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.

Western Digital Completes Flash Business Separation

On February 21, 2025, Western Digital completed the separation of its Flash business into a new independent company, Sandisk Corporation, which now trades on the Nasdaq under the symbol ‘SNDK’. This strategic move means Western Digital will no longer consolidate Sandisk’s financial results, and historical results will be reported as discontinued operations starting in the third quarter of fiscal 2025, impacting the company’s financial reporting and potentially its market positioning.