Have you been paying attention to shares of Western Digital (WDC)? Shares have been on the move with the stock up 46.6% over the past month. The stock hit a new 52-week high of $122.59 in the previous session. Western Digital has gained 101.3% since the start of the year compared to the 22.1% move for the Zacks Computer and Technology sector and the 43.4% return for the Zacks Computer- Storage Devices industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each 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 $6.62 per share on $10.92 in revenues. This represents a 34.28% change in EPS on a -17.76% change in revenues. For the next fiscal year, the company is expected to earn $7.34 per share on $11.28 in revenues. This represents a year-over-year change of 10.91% and 3.32%, respectively.
Valuation Metrics
While Western Digital has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? 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 they provide investors with an additional way to sort 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 A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.1X. On a trailing cash flow basis, the stock currently trades at 19.8X versus its peer group's average of 19.8X. Additionally, the stock has a PEG ratio of 0.93. 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 consider the stock's Zacks Rank, 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 meets the list of requirements. 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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