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.
