What Can We Learn From Western Digital Corporation (WDC)’s Valuation Ratios?

Western Digital Corporation (NASDAQ:WDC) finished Tuesday with a subtraction of -$0.53 to close at $56.43, a downside of -0.93 percent. An average of 2,694,480 shares of common stock have been traded in the last five days. There was a fall of -$0.27 in the past week. The last 20 days have seen an average of 2,863,725 shares traded, while the 50-day average volume stands at 4,025,148.

WDC stock has decreased by -6.57% in the last month. The company shares reached their 1-month lowest point of $55.11 on 10/06/21. With the stock rallying to its 52-week high on 06/04/21, shares of the company touched a low of $36.17 and a high of $78.19 in 52 weeks. In spite of this, the price is down -27.83% from the 52-week high.

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Insider Transactions

62 days have passed since Western Digital Corporation (WDC) last reported insider trading activity. Sundberg Lori S, who is EVP & Chief Human Res Officer, most recently acquired $3,380 shares at $67.92 per share on Aug 06. In this transaction, the insider spent $229,570. EVP, Chief Legal Officer & Sec, RAY MICHAEL CHARLES, disposed of 22,735 shares at a price of $59.92 on Jan 29. The insider now owns more than $1,362,170 worth of shares.

Valuation Metrics

Western Digital Corporation (WDC) has a trailing price-to-earnings (P/E) ratio of 21.48, which compares with the 23.30 for the broader industry and 36.66 for the sector. This means investors are optimistic about the stock’s future prospects. In the last five years, Western Digital Corporation’s PE ratio has ranged between 159.50 and 13.25. The stock’s beta is 1.63. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 1.02, the price-to-book (PB) ratio at 1.61, and the price-to-cash flow ratio at 22.90.

The company has a payout ratio of 0.00%. The company’s most recent quarterly dividend payment was $0.50 a share, without any change from last year.

The quick ratio of Western Digital Corporation for the three months ended June 29 was 1.30, and the current ratio was 2.00, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.79 and a total debt to equity ratio of 0.81 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 27.00% against a 5-year average of 28.2%. Western Digital Corporation’s EBITDA margin for the year ending June 29 is 14.55%, while its operating margin for the same period stands at 7.20%. Its gross profit as reported stood at $4.52 billion compared to revenue of $16.92 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Western Digital Corporation’s return on assets was 3.20%, compared to 0.6% over the last five years. In the past year, the return on investment has been 5.70%, and the 5-year average is 2.4%. Meanwhile, the return on equity (ROE) for the past 12 months has been 8.20% and the 5-year average holds at 1.6%. For the broader industry, ROE averaged 3.62 over the past year.

Earnings Surprise

In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $4.92 billion in the quarter, while revenues of $4.14 billion were grew 12.87%. The analyst consensus anticipated Western Digital Corporation’s latest quarter earnings to come in at $1.3 per share, but it turned out to be $1.86, a 43.10% surprise. For the quarter, EBITDA amounted to $936.0 million. Shareholders own equity worth $308.75 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Western Digital Corporation (WDC) price momentum. RSI 9-day as of the close on 05 October was 39.27%, suggesting the stock is Neutral, with historical volatility in this time frame at 21.01%.

As of today, WDC’s price is $56.77 -0.48% or -$0.27 from its 5-day moving average. WDC is currently trading -2.84% lower than its 20-day SMA and -21.48% lower than its 100-day SMA. However, the stock’s current price level is -9.51% below the SMA50 and +6.09% above the SMA200.

The stochastic %K and %D were 31.96% and 32.67%, respectively, and the average true range (ATR) was 1.70. With the 14-day stochastic at 27.91% and the average true range at 1.82, the RSI (14) stands at 40.37%. The stock has reached -0.54 on the 9-day MACD Oscillator while the 14-day reading was at -0.36.

Analyst Ratings

Summit Insights downgraded Western Digital Corporation (NASDAQ: WDC) to a a Hold rating in its most recent analyst report. Previously, the stock was rated as a a Buy.The consensus rating for Western Digital Corporation (WDC) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell WDC, while 9 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 19 others rate it as a “buy”.

What is WDC’s price target for the next 12 months?

Analysts predict a range of price targets between $66.00 and $140.00, with a median target of $92.00. Taking a look at these predictions, the average price target given by analysts for Western Digital Corporation (WDC) stock is $93.39.


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