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

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Western Digital (WDC - Free Report) closed at $48.53 in the latest trading session, marking a -0.76% move from the prior day. This change lagged the S&P 500's 2.12% gain on the day. Elsewhere, the Dow gained 2.13%, while the tech-heavy Nasdaq added 2.64%.

Coming into today, shares of the maker of hard drives for businesses and personal computers had lost 10.14% in the past month. In that same time, the Computer and Technology sector lost 6.28%, while the S&P 500 lost 4.4%.

Wall Street will be looking for positivity from WDC as it approaches its next earnings report date. This is expected to be January 24, 2019. On that day, WDC is projected to report earnings of $1.59 per share, which would represent a year-over-year decline of 59.75%. Our most recent consensus estimate is calling for quarterly revenue of $4.31 billion, down 19.31% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.30 per share and revenue of $18.13 billion. These totals would mark changes of -50.44% and -12.17%, respectively, from last 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 42.22% lower. WDC is currently a Zacks Rank #5 (Strong Sell).

Digging into valuation, WDC currently has a Forward P/E ratio of 6.7. This valuation marks a discount compared to its industry's average Forward P/E of 18.14.

Also, we should mention that WDC has a PEG ratio of 0.35. 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. The Computer- Storage Devices industry currently had an average PEG ratio of 1.28 as of yesterday's close.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 82, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.




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