Western Digital (WDC) AI Stock Analysis

• Market Cap: $37.08B
• Dividend Yield: 0.19%
• Average Volume (3M): 7.83M
• Price to Earnings (P/E): 22.2
• Beta (1Y): 2.13
• Revenue Growth: 2.12%
• EPS Growth: N/A
• Country: US
• Employees: 51,000
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 1.66
• Shares Outstanding: 346,922,120
• 10 Day Avg. Volume: 9,219,245
• 30 Day Avg. Volume: 7,834,409
• PEG Ratio: -0.04
• Price to Book (P/B): 3.96
• Price to Sales (P/S): 2.31
• P/FCF Ratio: 17.10
• Enterprise Value/Market Cap: 0.69
• Enterprise Value/Revenue: 1.92
• Enterprise Value/Gross Profit: 5.06
• Enterprise Value/Ebitda: 9.82
• 1Y Price Target: $100.75
• Price Target Upside: -5.74% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 74 Outperform
• Price Target: $85.00 ▼(-20.47% 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

Revenue Growth

The significant revenue growth indicates strong market demand and effective business strategies, enhancing the company's competitive position.

Debt Reduction

Reducing debt improves financial flexibility and reduces risk, allowing the company to invest in growth opportunities and return value to shareholders.

Cloud and Data Center Growth

Strong growth in cloud and data center segments positions Western Digital well in high-demand markets, supporting long-term revenue stability.

Negative Factors

Consumer Segment Decline

Declining consumer segment revenue highlights challenges in maintaining market share and could impact overall growth if not addressed.

Tariff Uncertainties

Tariff uncertainties pose a risk to cost structures and supply chains, potentially affecting profitability and strategic planning.

Historical Financial Volatility

Historical financial instability raises concerns about the company's ability to sustain recent improvements and manage future downturns.

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	6.32B	6.25B	18.79B	16.92B
Gross Profit	5.05B	3.69B	1.77B	1.39B	5.87B	4.52B
EBITDA	2.60B	1.94B	243.00M	289.00M	3.40B	2.46B
Net Income	1.87B	1.86B	-798.00M	-1.68B	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: 106.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 106.88 is above the 20-day moving average (MA) of 98.59, above the 50-day MA of 84.03, and above the 200-day MA of 57.69, indicating a bullish trend. The MACD of 7.81 indicates Negative momentum. The RSI at 72.18 is Negative, neither overbought nor oversold. The STOCH value of 60.50 is Neutral, 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	$37.08B	22.22	25.98%	0.19%	2.12%	―
NTAP	74 Outperform	23.93B	21.18	120.10%	1.74%	3.45%	9.69%
STX	72 Outperform	46.32B	32.13	-324.28%	1.31%	38.86%	337.22%
SMCI	68 Neutral	27.23B	27.61	16.64%	―	47.04%	-17.89%
HPQ	66 Neutral	24.97B	9.72	-209.75%	4.33%	3.11%	-3.54%
PSTG	65 Neutral	27.08B	202.36	10.55%	―	11.31%	-1.30%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

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.