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

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Western Digital (WDC - Free Report) closed at $54.30 in the latest trading session, marking a +1.06% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.01%. At the same time, the Dow added 0.01%, and the tech-heavy Nasdaq gained 0.2%.

Coming into today, shares of the maker of hard drives for businesses and personal computers had gained 6.65% in the past month. In that same time, the Computer and Technology sector gained 2.57%, while the S&P 500 gained 2.67%.

Investors will be hoping for strength from WDC as it approaches its next earnings release. The company is expected to report EPS of $0.57, down 60.69% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.21 billion, down 0.46% from the year-ago period.

WDC's full-year Zacks Consensus Estimates are calling for earnings of $2.56 per share and revenue of $16.62 billion. These results would represent year-over-year changes of -47.11% and +0.29%, respectively.

Any recent changes to analyst estimates for WDC should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 2.5% higher. WDC is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, WDC currently has a Forward P/E ratio of 20.98. This represents a premium compared to its industry's average Forward P/E of 17.78.

Investors should also note that WDC has a PEG ratio of 10.49 right now. 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 3.08 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 193, which puts it in the bottom 25% 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.

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