Western Digital (WDC) AI Stock Analysis

• Market Cap: $26.04B
• Dividend Yield: 0.13%
• Average Volume (3M): 7.11M
• Price to Earnings (P/E): 15.6
• Beta (1Y): 2.12
• Revenue Growth: 2.12%
• EPS Growth: N/A
• Country: US
• Employees: 51,000
• Sector: Technology
• Sector Strength: 89
• Industry: Computer Hardware
• EPS (TTM): 1.66
• Shares Outstanding: 346,922,120
• 10 Day Avg. Volume: 6,174,286
• 30 Day Avg. Volume: 7,111,691
• 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: 0.98
• Enterprise Value/Revenue: 1.92
• Enterprise Value/Gross Profit: 5.06
• Enterprise Value/Ebitda: 13.34
• 1Y Price Target: $87.60
• Price Target Upside: 16.71% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 72 Outperform
• Price Target: $87.00 ▲(15.91% Upside)

Western Digital's overall stock score reflects a strong recovery in financial performance, supported by positive earnings call highlights and strategic corporate changes. However, technical indicators suggest caution due to potential overbought conditions. The valuation is slightly elevated, yet the earnings call and corporate events provide a positive outlook for future growth.

Positive Factors

Cloud Sales Growth

Cloud sales represented 90% of total June quarter sales, up from 87% in the prior quarter.

Financial Performance

Driven by continued strength in datacenter sales, Western Digital posted upside results for the June quarter and guided higher for the September quarter.

Shareholder Returns

The firm announced a quarterly dividend of $0.10/share, and Western Digital’s BOD has also approved a new $2 billion share buyback.

Negative Factors

Cash Position

Cash and cash equivalents were $2.11 billion versus $3.48 billion in the prior quarter.

Debt Management

Debt reduction from partial SNDK share proceeds will continue over the next two quarters, enhancing financial stability.

Valuation Concerns

The analyst highlights a valuation discount of over 20% for Western Digital compared to its competitor, suggesting potential value for investors.

Western Digital Business Overview & Revenue Model

Company Description

Western Digital Corporation (WDC) is a leading global provider of data storage solutions, specializing in hard disk drives (HDDs), solid-state drives (SSDs), and other data storage technologies. The company operates in two primary segments: Client Solutions and Data Center Solutions. Its core products include internal and external drives for personal computers, enterprise storage systems for data centers, and flash storage solutions for various applications, serving a diverse range of markets from consumer electronics to enterprise IT infrastructure.

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 has demonstrated a significant turnaround in its financial performance, with improved revenue growth, profitability, and cash flow. While the company has stabilized its balance sheet, historical volatility and leverage levels pose some risks. Overall, the financial statements reflect a strong recovery trajectory.

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	24.43B	26.26B	26.13B
Cash, Cash Equivalents and Short-Term Investments	2.11B	2.11B	1.88B	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	23.55B	14.04B	15.41B
Stockholders Equity	5.54B	5.54B	10.82B	10.85B	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: 75.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 75.06 is above the 20-day moving average (MA) of 73.17, above the 50-day MA of 66.42, and above the 200-day MA of 51.82, indicating a bullish trend. The MACD of 2.88 indicates Positive momentum. The RSI at 62.53 is Neutral, neither overbought nor oversold. The STOCH value of 49.27 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
NTAP	76 Outperform	$21.77B	19.17	108.51%	1.91%	5.02%	22.19%
STX	76 Outperform	$32.84B	22.81	-109.27%	1.85%	38.86%	337.22%
WDC	72 Outperform	$26.04B	15.56	25.98%	0.13%	2.12%	―
SMCI	71 Outperform	$27.15B	27.38	17.90%	―	47.04%	-17.89%
PSTG	71 Outperform	$18.91B	157.75	9.76%	―	10.85%	30.85%
HPQ	65 Neutral	$25.12B	10.31	84.33%	4.28%	2.08%	-12.41%
Sector *	61 Neutral	$36.32B	7.30	-7.27%	1.96%	7.76%	-6.42%

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.