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Western Digital (WDC) Soars 6.3%: Is Further Upside Left in the Stock?

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Western Digital (WDC - Free Report) shares rallied 6.3% in the last trading session to close at $76.42. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 4.6% gain over the past four weeks.

The increase in share price can be attributed to the constant buzz surrounding new cryptocurrency — Chia — which is expected to drive demand for hard disk drives (HDDs) and solid state drives (SSDs).

Per a Tom’s Hardware report, Chia is a storage-based digital currency that utilizes hard disk and solid state storage for mining new coins.

Price and Consensus

Price Consensus Chart for WDC

This maker of hard drives for businesses and personal computers is expected to post quarterly earnings of $1.37 per share in its upcoming report, which represents a year-over-year change of +11.4%. Revenues are expected to be $4.52 billion, up 5.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Western Digital, the consensus EPS estimate for the quarter has been revised 41.5% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on WDC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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