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Western Digital
(NASDAQ:WDC)
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Rating:73Outperform
Price Target:
$463.00
▲(2.72% Upside)
Action:Reiterated
Date:10/03/26
The score is driven primarily by improved financial performance (strong margins, cash flow, and lower leverage) and upbeat earnings-call guidance with a clear product roadmap. Offsetting these positives, technicals indicate weak near-term momentum (below key moving averages with negative MACD), and the company’s historically high cyclicality tempers confidence in sustaining peak profitability despite a reasonable P/E and very high dividend yield.
Positive Factors
AI-driven cloud storage growth
Strong cloud growth and rising storage volumes connect Western Digital to the durable expansion of AI-related data infrastructure. With cloud revenue representing 89% of total revenue, sustained data creation and capacity needs can support demand beyond short-term product cycles.
Negative Factors
Severe earnings cyclicality
The sharp movement from losses to peak-level profitability shows that Western Digital remains highly exposed to storage pricing, demand, inventory, and mix cycles. This volatility makes current margins and cash generation less dependable over a full cycle and can constrain planning during a weaker industry environment.
Read all positive and negative factors
Positive Factors
Negative Factors
AI-driven cloud storage growth
Strong cloud growth and rising storage volumes connect Western Digital to the durable expansion of AI-related data infrastructure. With cloud revenue representing 89% of total revenue, sustained data creation and capacity needs can support demand beyond short-term product cycles.
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
$148.71B
Dividend Yield0.14%
Average Volume (3M)7.48M
Price to Earnings (P/E)14.6
Beta (1Y)2.20
Revenue Growth-2.71%
EPS Growth407.72%
CountryUS
Employees40,000
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)27.16
Shares Outstanding374,323,270
10 Day Avg. Volume10,043,847
30 Day Avg. Volume7,484,716
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 Cap1.41
Enterprise Value/Revenue16.20
Enterprise Value/Gross Profit33.16
Enterprise Value/Ebitda24.07
Forecast
1Y Price Target
$667.40Price Target Upside48.06% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)20.47
Revenue Forecast (FY)$19.22B
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 makes money primarily by selling storage hardware and related solutions, with revenue recognized from product shipments to OEMs, cloud/enterprise customers, distributors, and retailers. Key revenue streams include: (1) HDD revenue:...
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
450.75
Price Trends
457.53
Negative
508.41
Negative
405.71
Negative
Market Momentum
-14.97
Positive
38.42
Neutral
10.16
Positive
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 450.75 is above the 20-day moving average (MA) of 435.12, below the 50-day MA of 457.53, and above the 200-day MA of 405.71, indicating a bearish trend. The MACD of -14.97 indicates Positive momentum. The RSI at 38.42 is Neutral, neither overbought nor oversold. The STOCH value of 10.16 is Positive, 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $228.62B | 20.34 | 93.13% | ― | 175.30% | ― | |
74 Outperform | $46.58B | 33.03 | 113.67% | 0.88% | 12.15% | 24.60% | |
74 Outperform | $97.52B | 36.55 | 10.87% | 0.78% | 26.63% | 130.65% | |
73 Outperform | $148.71B | 14.63 | 118.65% | 0.14% | -2.71% | 407.72% | |
73 Outperform | $372.62B | 33.52 | -574.57% | 0.39% | 48.86% | 152.40% | |
70 Outperform | $178.05B | 53.85 | 348.17% | 0.38% | 34.06% | 108.45% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
WDC
Western Digital
386.94
268.30
226.15%
NTAP
NetApp
239.18
122.12
104.32%
STX
Seagate Tech
753.25
535.03
245.17%
HPE
Hewlett Packard Enterprise
70.33
45.97
188.69%
DELL
Dell Technologies
576.76
425.29
280.78%
SNDK
SanDisk Corp
1,487.33
1,352.72
1004.92%
Western Digital Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Western Digital Announces Redemption of 3% Convertible Notes
Neutral
Sep 14, 2026
On September 14, 2026, Western Digital announced it will redeem all $109.5 million outstanding of its 3.00% Convertible Senior Notes due 2028 on November 16, 2026, at 100% of principal plus accrued interest, after which no notes will remain and in...
Business Operations and StrategyPrivate Placements and Financing
Western Digital Restructures Convertible Debt Through Exchange Agreements
Neutral
Aug 26, 2026
On August 26, 2026, Western Digital Corporation entered into privately negotiated exchange agreements with certain holders of its 3.00% Convertible Senior Notes due 2028, covering approximately $191.0 million in aggregate principal amount. The hol...
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.