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Western Digital (WDC) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Western Digital (WDC - Free Report) closed at $47.71, marking a -1.63% move from the previous day. This change lagged the S&P 500's 0.66% loss on the day. At the same time, the Dow lost 1.01%, and the tech-heavy Nasdaq lost 0.55%.

Heading into today, shares of the maker of hard drives for businesses and personal computers had lost 11.75% over the past month, lagging the Computer and Technology sector's gain of 1.57% and the S&P 500's gain of 1.77% in that time.

Investors will be hoping for strength from WDC as it approaches its next earnings release. In that report, analysts expect WDC to post earnings of $0.57 per share. This would mark a year-over-year decline of 60.69%. Meanwhile, our latest consensus estimate is calling for revenue of $4.21 billion, down 0.5% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.57 per share and revenue of $16.63 billion. These totals would mark changes of -46.9% and +0.35%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for WDC. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. WDC is holding a Zacks Rank of #4 (Sell) right now.

Investors should also note WDC's current valuation metrics, including its Forward P/E ratio of 18.87. Its industry sports an average Forward P/E of 16.34, so we one might conclude that WDC is trading at a premium comparatively.

It is also worth noting that WDC currently has a PEG ratio of 9.44. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. WDC's industry had an average PEG ratio of 2.94 as of yesterday's close.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 197, which puts it in the bottom 23% 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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