Western Digital (WDC) AI Stock Analysis

• Market Cap: $24.01B
• Dividend Yield: 0.15%
• Average Volume (3M): 6.14M
• Price to Earnings (P/E): 13.1
• Beta (1Y): 2.21
• Revenue Growth: 21.22%
• EPS Growth: N/A
• Country: US
• Employees: 51,000
• Sector: Technology
• Sector Strength: 91
• Industry: Computer Hardware
• EPS (TTM): 1.36
• Shares Outstanding: 348,878,360
• 10 Day Avg. Volume: 5,907,244
• 30 Day Avg. Volume: 6,143,416
• PEG Ratio: 0.52
• Price to Book (P/B): 4.33
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.64
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 0.48
• Enterprise Value/Gross Profit: 5.14
• Enterprise Value/Ebitda: 3.68
• 1Y Price Target: $69.06
• Price Target Upside: 0.35% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19

• Rating: 71 Outperform
• Price Target: $77.00 ▲(11.89%Upside)

Western Digital's overall stock score is driven by strong technical analysis and corporate events, highlighting recent positive momentum and strategic leadership changes. Financial performance shows improvement, yet revenue decline poses risks. Valuation is reasonable, and the latest earnings call underscores both opportunities and challenges.

Positive Factors

Share Repurchase

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

Technology Competitiveness

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

Valuation

Analyst sees over 30% upside to the new $78 price target, with an attractive 2:1 risk/reward skew.

Negative Factors

Technology Lag

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

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 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's financial performance shows signs of recovery with improved profitability and cash flow. However, revenue decline and historical volatility in earnings pose risks. Moderate leverage and strong ROE are positive, but sustainability concerns persist.

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

Western Digital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 68.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 68.82 is above the 20-day moving average (MA) of 66.35, above the 50-day MA of 59.35, and above the 200-day MA of 49.99, indicating a bullish trend. The MACD of 2.79 indicates Positive momentum. The RSI at 69.69 is Neutral, neither overbought nor oversold. The STOCH value of 86.06 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
SMCI	78 Outperform	$32.51B	30.06	21.03%	―	82.10%	6.35%
PSTG	76 Outperform	$18.82B	154.98	9.76%	―	10.85%	30.85%
NTAP	74 Outperform	$21.03B	18.49	108.51%	1.98%	5.02%	22.19%
WDC	71 Outperform	$24.01B	13.08	28.45%	0.15%	21.22%	―
HPQ	66 Neutral	$24.12B	9.90	84.33%	4.45%	2.08%	-12.41%
STX	61 Neutral	$32.02B	21.80	-109.27%	1.90%	36.29%	―
Sector *	51 Neutral	AU$1.67B	2.26	-31.66%	3.53%	16.55%	-7.79%

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.