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

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In the latest trading session, Western Digital (WDC - Free Report) closed at $63.24, marking a -0.01% move from the previous day. This move lagged the S&P 500's daily gain of 0.01%. At the same time, the Dow lost 0.09%, and the tech-heavy Nasdaq gained 0.26%.

Heading into today, shares of the maker of hard drives for businesses and personal computers had lost 7.65% over the past month, lagging the Computer and Technology sector's gain of 5.63% and the S&P 500's gain of 3.73% in that time.

WDC will be looking to display strength as it nears its next earnings release, which is expected to be October 25, 2018. In that report, analysts expect WDC to post earnings of $3.08 per share. This would mark a year-over-year decline of 13.48%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.14 billion, down 0.83% from the year-ago period.

WDC's full-year Zacks Consensus Estimates are calling for earnings of $11.61 per share and revenue of $20.59 billion. These results would represent year-over-year changes of -21.18% and -0.28%, respectively.

Investors should also note any recent changes to analyst estimates for WDC. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. WDC is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, WDC is currently trading at a Forward P/E ratio of 5.45. Its industry sports an average Forward P/E of 14.1, so we one might conclude that WDC is trading at a discount comparatively.

Investors should also note that WDC has a PEG ratio of 0.29 right now. 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. Computer- Storage Devices stocks are, on average, holding a PEG ratio of 1.13 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 50, putting it in the top 20% 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.

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