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Western Digital (WDC) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Western Digital (WDC - Free Report) closed at $63.81, marking a +0.7% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.62%. Meanwhile, the Dow gained 0.52%, and the Nasdaq, a tech-heavy index, added 0.86%.

Coming into today, shares of the maker of hard drives for businesses and personal computers had lost 17.82% in the past month. In that same time, the Computer and Technology sector gained 0.15%, while the S&P 500 gained 1.98%.

WDC will be looking to display strength as it nears its next earnings release, which is expected to be October 25, 2018. The company is expected to report EPS of $3.08, down 13.48% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.14 billion, down 0.83% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.61 per share and revenue of $20.59 billion, which would represent changes of -21.18% and -0.28%, respectively, from the prior year.

Any recent changes to analyst estimates for WDC should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 15.39% lower. WDC currently has a Zacks Rank of #3 (Hold).

Digging into valuation, WDC currently has a Forward P/E ratio of 5.45. This represents a discount compared to its industry's average Forward P/E of 13.88.

We can also see that WDC currently has a PEG ratio of 0.29. 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. Computer- Storage Devices stocks are, on average, holding a PEG ratio of 1.03 based on yesterday's closing prices.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 37, putting it in the top 15% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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