Back to top

Image: Bigstock

Western Digital (WDC) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

Western Digital (WDC - Free Report) closed at $36.69 in the latest trading session, marking a +0.3% move from the prior day. The stock outpaced the S&P 500's daily loss of 1.58%. At the same time, the Dow lost 1.99%, and the tech-heavy Nasdaq lost 1.63%.

Heading into today, shares of the maker of hard drives for businesses and personal computers had lost 22% over the past month, lagging the Computer and Technology sector's loss of 2.81% and the S&P 500's loss of 6.62% in that time.

Investors will be hoping for strength from WDC as it approaches its next earnings release, which is expected to be January 24, 2019. On that day, WDC is projected to report earnings of $1.49 per share, which would represent a year-over-year decline of 62.28%. Meanwhile, our latest consensus estimate is calling for revenue of $4.27 billion, down 20.01% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.98 per share and revenue of $17.93 billion, which would represent changes of -52.61% and -13.14%, respectively, from the prior year.

Any recent changes to analyst estimates for WDC should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.98% lower. WDC currently has a Zacks Rank of #5 (Strong Sell).

Digging into valuation, WDC currently has a Forward P/E ratio of 5.24. Its industry sports an average Forward P/E of 13.2, so we one might conclude that WDC is trading at a discount comparatively.

Meanwhile, WDC's PEG ratio is currently 0.28. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer- Storage Devices was holding an average PEG ratio of 0.93 at yesterday's closing price.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 225, putting it in the bottom 12% 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Western Digital Corporation (WDC) - free report >>

Published in