Technology

Western Digital (WDC) Outpaces Stock Market Gains: What You Should Know

Western Digital (WDC) closed the most recent trading day at $45.76, moving +0.84% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.36%. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.34%.

Coming into today, shares of the maker of hard drives for businesses and personal computers had lost 6.51% in the past month. In that same time, the Computer and Technology sector gained 1.96%, while the S&P 500 gained 0.64%.

Wall Street will be looking for positivity from WDC as it approaches its next earnings report date. On that day, WDC is projected to report earnings of $0.49 per share, which would represent a year-over-year decline of 86.5%. Meanwhile, our latest consensus estimate is calling for revenue of $3.69 billion, down 26.4% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.55 per share and revenue of $16.69 billion. These totals would mark changes of -62.32% and -19.16%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for WDC. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. WDC is currently a Zacks Rank #3 (Hold).

In terms of valuation, WDC is currently trading at a Forward P/E ratio of 8.18. For comparison, its industry has an average Forward P/E of 14.77, which means WDC is trading at a discount to the group.

Meanwhile, WDC's PEG ratio is currently 0.43. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer- Storage Devices was holding an average PEG ratio of 1.54 at yesterday's closing price.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 73, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.