Shares of Western Digital (WDC) have been strong performers lately, with the stock up 24.9% over the past month. The stock hit a new 52-week high of $96.18 in the previous session. Western Digital has gained 59.4% since the start of the year compared to the 18.2% move for the Zacks Computer and Technology sector and the 30.6% return for the Zacks Computer- Storage Devices industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 30, 2025, Western Digital reported EPS of $1.66 versus consensus estimate of $1.48.
For the current fiscal year, Western Digital is expected to post earnings of $6.5 per share on $10.92 in revenues. This represents a 31.85% change in EPS on a -17.76% change in revenues. For the next fiscal year, the company is expected to earn $7.11 per share on $11.28 in revenues. This represents a year-over-year change of 9.38% and 3.32%, respectively.
Valuation Metrics
Western Digital may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Western Digital has a Value Score of C. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 14.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 15.9X. On a trailing cash flow basis, the stock currently trades at 15.7X versus its peer group's average of 17X. Additionally, the stock has a PEG ratio of 1.06. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Western Digital currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Western Digital fits the bill. Thus, it seems as though Western Digital shares could have a bit more room to run in the near term.
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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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