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Western Digital
(NASDAQ:WDC)
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Rating:74Outperform
Price Target:
$600.00
▲(15.43% Upside)
Action:Reiterated
Date:08/07/26
The score is driven primarily by strong financial performance (margin and cash-flow rebound plus improved leverage) and a bullish earnings-call outlook with strong near-term guidance and product roadmap momentum. Offsetting factors are weaker near-term technical trends (below key moving averages with negative MACD) and a mixed valuation picture (higher P/E partly balanced by a high dividend yield).
Positive Factors
Cloud and Nearline Storage Demand
Strong cloud and nearline demand supports Western Digital’s core data-center franchise. Continued growth in stored data and AI workloads can sustain capacity expansion, customer engagement and revenue opportunities over the next several years.
Negative Factors
Cyclical Earnings and Cash-Flow Volatility
Western Digital’s results remain highly sensitive to storage demand, pricing and supply conditions. The prior downturn demonstrates that profitability and cash generation can deteriorate quickly, limiting earnings visibility through the next industry cycle.
Read all positive and negative factors
Positive Factors
Negative Factors
Cloud and Nearline Storage Demand
Strong cloud and nearline demand supports Western Digital’s core data-center franchise. Continued growth in stored data and AI workloads can sustain capacity expansion, customer engagement and revenue opportunities over the next several years.
Read all positive factors
Western Digital Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyWestern Digital (WDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$178.89B
Dividend Yield0.11%
Average Volume (3M)9.17M
Price to Earnings (P/E)17.0
Beta (1Y)2.12
Revenue Growth-2.71%
EPS Growth407.72%
CountryUS
Employees40,000
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)27.16
Shares Outstanding360,540,950
10 Day Avg. Volume6,896,360
30 Day Avg. Volume9,173,647
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)20.98
Price to Sales (P/S)14.39
P/FCF Ratio52.96
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$679.22Price Target Upside30.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
EPS Forecast (FY)20.17
Revenue Forecast (FY)$19.11B
Western Digital Business Overview & Revenue Model
Company Description
Western Digital Corporation designs, manufactures, and markets a broad range of data storage devices and software solutions across the United States, China, Hong Kong, Europe, the Middle East, Africa, and the rest of Asia, serving an international...
How the Company Makes Money
Western Digital primarily makes money by selling storage hardware and related solutions, with revenue recognized mainly from product sales. Key revenue streams include: (1) HDD revenue: sales of high-capacity HDDs, particularly for cloud and enter...
Western Digital Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call emphasized strong fiscal 2026 financial performance — double-digit revenue growth (36%), substantial margin expansion, doubled EPS, robust free cash flow ($3.5B) and active capital returns — and a constructive outlook for fiscal 2027 with continued pricing improvement, product ramps (40 TB ePMR, 44 TB HAMR) and durable AI-driven demand. Notable near-term concerns include a Q4 exabyte growth slowdown (22% YoY), quarter-to-quarter variability tied to LTAs and product mix, and the usual execution/qualification risk for new technologies. Overall, the positives (material revenue, margin, cash flow, product roadmap, and guidance strength) materially outweigh the manageable short-term risks discussed.Positive Updates
Strong Full-Year Revenue Growth
Fiscal 2026 revenue increased 36% year-over-year to $12.9 billion, driven by broadening demand and customer engagements.
Negative Updates
Exabyte Growth Deceleration in Q4 vs. Recent Quarters
Q4 exabyte growth of 22% YoY represents a slowdown relative to recent ~30% quarter-to-quarter exabyte growth trends; management attributes this to customer mix and timing, but the deceleration drew analyst scrutiny.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Full-Year Revenue Growth
Fiscal 2026 revenue increased 36% year-over-year to $12.9 billion, driven by broadening demand and customer engagements.
Read all positive updates
Company Guidance
Western Digital guided Q1 FY2027 revenue of $4.1 billion ± $0.1 billion (midpoint +45% YoY), gross margin of 55–56%, operating expenses of $390–$400 million, interest & other expense of ~$15 million, an effective tax rate of ~17%, and non‑GAAP diluted EPS of $4.00 ± $0.15 on ~388 million diluted shares; management also reiterated a medium‑term exabyte growth target of >25% YoY, noted Q4 shipments of 231 EB (+22% YoY) and FY26 revenue of $12.9B (+36% YoY) with $3.5B free cash flow (27% FCF margin), and outlined product/ramp metrics: 40 TB ePMR now shipping and expected to exceed 50% of nearline bits by Q3 FY27, UltraSMR ~60% of nearline exabyte shipments exiting FY27, and 44 TB HAMR on track for H1 CY2027, alongside continued share repurchases/dividends (board declared $0.15/share).Western Digital Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
81
Very Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 12.92B | 9.52B | 6.32B | 6.25B | 18.79B |
| Gross Profit | 6.31B | 3.69B | 1.77B | 1.39B | 5.87B |
| EBITDA | 10.28B | 1.94B | 243.00M | 289.00M | 3.40B |
| Net Income | 9.42B | 1.86B | -798.00M | -1.68B | 1.55B |
Balance Sheet | |||||
| Total Assets | 13.86B | 14.00B | 24.19B | 24.55B | 26.26B |
| Cash, Cash Equivalents and Short-Term Investments | 1.58B | 2.47B | 1.55B | 2.02B | 2.33B |
| Total Debt | 1.05B | 5.08B | 7.82B | 8.47B | 7.62B |
| Total Liabilities | 5.00B | 8.69B | 13.37B | 13.58B | 14.04B |
| Stockholders Equity | 8.86B | 5.31B | 10.82B | 10.96B | 12.22B |
Cash Flow | |||||
| Free Cash Flow | 3.51B | 1.28B | -781.00M | -1.22B | 773.00M |
| Operating Cash Flow | 3.93B | 1.69B | -294.00M | -408.00M | 1.88B |
| Investing Cash Flow | -429.00M | 150.00M | -27.00M | -762.00M | -1.19B |
| Financing Cash Flow | -4.03B | -1.61B | 187.00M | 875.00M | -1.72B |
Western Digital Technical Analysis
Negative
519.80
Price Trends
550.01
Negative
489.46
Negative
355.06
Positive
Market Momentum
-14.99
Negative
44.02
Neutral
58.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDC, the sentiment is Negative. The current price of 519.8 is above the 20-day moving average (MA) of 494.05, below the 50-day MA of 550.01, and above the 200-day MA of 355.06, indicating a neutral trend. The MACD of -14.99 indicates Negative momentum. The RSI at 44.02 is Neutral, neither overbought nor oversold. The STOCH value of 58.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WDC.
Western Digital Risk Analysis
Western Digital disclosed 28 risk factors in its most recent earnings report. Western Digital reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Western Digital Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $40.17B | 30.25 | 114.18% | 1.22% | 5.29% | 10.66% | |
74 Outperform | $178.89B | 17.01 | 118.65% | 0.10% | -2.71% | 407.72% | |
68 Neutral | $24.20B | 10.02 | 25.08% | ― | 77.79% | 106.58% | |
65 Neutral | $27.40B | 10.93 | -473.44% | 4.62% | 7.20% | 4.12% | |
63 Neutral | $204.81B | 57.26 | 348.17% | 0.35% | 34.06% | 108.45% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
WDC
Western Digital
462.09
386.66
512.57%
HPQ
HP
29.94
4.76
18.92%
NTAP
NetApp
194.48
87.92
82.52%
STX
Seagate Tech
832.56
675.46
429.95%
SMCI
Super Micro Computer
36.58
-6.03
-14.15%
Western Digital Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Western Digital Announces Sandisk Share Exchange With Investors
Neutral
Jun 11, 2026
On June 11, 2026, Western Digital Corporation entered into privately negotiated exchange agreements with certain institutional investors to swap 1,038,681 shares of Sandisk Corporation common stock it holds for an undetermined number of its own co...
Business Operations and StrategyPrivate Placements and Financing
Western Digital Restructures Convertible Debt via Equity Exchange
Neutral
Jun 3, 2026
On June 2, 2026, Western Digital entered into privately negotiated exchange agreements with certain holders of its 3.00% Convertible Senior Notes due 2028, covering about $858.4 million in aggregate principal. The company agreed to pay cash equal ...
Business Operations and StrategyExecutive/Board Changes
Western Digital Adds AI-Focused Veteran to Board
Positive
May 28, 2026
Western Digital announced that on May 26, 2026, its board of directors unanimously appointed veteran technology executive Manuvir Das as a director and member of the audit committee, expanding the board to nine members, eight of whom are independe...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.