Western Digital (WDC) Increases Despite Market Slip: Here's What You Need to Know

Western Digital (WDC) closed the most recent trading day at $301.05, moving +2.12% from the previous trading session. This change outpaced the S&P 500's 0.37% loss on the day. Elsewhere, the Dow lost 0.18%, while the tech-heavy Nasdaq lost 0.84%.

Prior to today's trading, shares of the maker of hard drives for businesses and personal computers had gained 5.12% outpaced the Computer and Technology sector's loss of 2.83% and the S&P 500's loss of 3.7%.

The investment community will be paying close attention to the earnings performance of Western Digital in its upcoming release. In that report, analysts expect Western Digital to post earnings of $2.34 per share. This would mark year-over-year growth of 72.06%. In the meantime, our current consensus estimate forecasts the revenue to be $3.23 billion, indicating a 40.72% growth compared to the corresponding quarter of the prior year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.96 per share and a revenue of $12.43 billion, signifying shifts of +81.74% and -6.38%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for Western Digital. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Western Digital currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, Western Digital currently has a Forward P/E ratio of 32.9. This valuation marks a premium compared to its industry average Forward P/E of 12.73.

It's also important to note that WDC currently trades at a PEG ratio of 0.64. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. As of the close of trade yesterday, the Computer- Storage Devices industry held an average PEG ratio of 1.36.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 23, finds itself in the top 10% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WDC in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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