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Western Digital Corporation
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ShareEven though the stock has more than doubled since its March lows, it still isn't expensive, trading at 13.9x forward earnings.
Company Description
Western Digital is the second largest manufacturer of hard drives in world.
The company's products include 3.5-inch, 2.5-inch, and 1.0-inch form factor drives, as well as enterprise hard drive products, which are offered under various brand names that include WD Caviar, WD Raptor, WD Scorpio, WD Passport, My Book, My DVR Expander, GreenPower, and WD Raid Edition.
Consensus Estimates Rise
Western Digital is scheduled to report fourth-quarter 2009 results on July 28. Ahead of the report, analysts are raising estimates for the quarter and the full year.
Fourth-quarter consensus rose 5 cents to 27 cents in the last month with 5 out of 14 covering analysts raising during that period.
5 out of 12 covering analysts are also feeling bullish on the full year as 2009 consensus estimates climbed 4 cents to $2.06 in the last 30 days.
Western Digital Beat Big in the Third Quarter
On Apr 23, the company reported third-quarter 2009 results which surprised on analysts' estimates by 172.73%. Adjusted earnings per share were 30 cents compared to analysts' estimates of 11 cents.
However, revenue fell from a year ago to $1.6 billion from $2.1 billion due to the worldwide slowdown in PC and electronic device sales.
Western Digital continues to generate cash, taking in another $355 million in the third quarter. Its total cash hoard at the end of March 2009 was $1.6 billion.
Value Fundamentals
Western Digital is a Zacks #1 Rank (strong buy) stock. The company has a stellar 5-year average return on equity (ROE) of 34.90%.
Despite a sharp move higher in the stock, as you can see from the 1-year chart below, it still has attractive value characteristics with a price-to-book of 2.25.
Read the full analyst report on WDC
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