Western Digital (WDC) closed the most recent trading day at $80.34, moving -2.07% from the previous trading session. This move lagged the S&P 500's daily loss of 0.64%. Elsewhere, the Dow saw a downswing of 0.2%, while the tech-heavy Nasdaq depreciated by 1.15%.
Heading into today, shares of the maker of hard drives for businesses and personal computers had gained 4.26% over the past month, outpacing the Computer and Technology sector's gain of 2.91% and the S&P 500's gain of 1.91%.
The upcoming earnings release of Western Digital will be of great interest to investors. In that report, analysts expect Western Digital to post earnings of $1.57 per share. This would mark a year-over-year decline of 11.8%. At the same time, our most recent consensus estimate is projecting a revenue of $2.7 billion, reflecting a 34.03% fall from the equivalent quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $6.5 per share and a revenue of $10.92 billion, indicating changes of +31.85% and -17.76%, respectively, from the former year.
Any recent changes to analyst estimates for Western Digital should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been a 9.55% rise in the Zacks Consensus EPS estimate. Currently, Western Digital is carrying a Zacks Rank of #1 (Strong Buy).
Looking at valuation, Western Digital is presently trading at a Forward P/E ratio of 12.62. This indicates a discount in contrast to its industry's Forward P/E of 15.14.
One should further note that WDC currently holds a PEG ratio of 0.91. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Computer- Storage Devices industry stood at 2.32 at the close of the market yesterday.
The Computer- Storage Devices industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 39, putting it in the top 16% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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Western Digital Corporation (WDC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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