WESTERN DIGITAL CORP (WDC) Stock Fundamental Analysis
NASDAQ:WDC - Nasdaq - US9581021055 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to WDC. WDC was compared to 32 industry peers in the Technology Hardware, Storage & Peripherals industry. Both the profitability and the financial health of WDC get a neutral evaluation. Nothing too spectacular is happening here. WDC has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year WDC was profitable.
WDC had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: WDC reported negative net income in multiple years.
In multiple years WDC reported negative operating cash flow during the last 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.76%, WDC belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
WDC has a Return On Equity of 29.56%. This is amongst the best in the industry. WDC outperforms 90.63% of its industry peers.
WDC has a Return On Invested Capital of 19.21%. This is amongst the best in the industry. WDC outperforms 84.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.76% | ||
| ROE | 29.56% | ||
| ROIC | 19.21% |
ROA(3y)-1.53%
ROA(5y)-0.49%
ROE(3y)-3.16%
ROE(5y)-0.89%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 11.07%, WDC belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
With an excellent Operating Margin value of 18.84%, WDC belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
WDC's Operating Margin has declined in the last couple of years.
WDC has a better Gross Margin (36.93%) than 71.88% of its industry peers.
WDC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.84% | ||
| PM (TTM) | 11.07% | ||
| GM | 36.93% |
OM growth 3Y-39.35%
OM growth 5Y-7.63%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.72%
GM growth 5Y-0.75%
2. Health
2.1 Basic Checks
WDC has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for WDC has been increased compared to 1 year ago.
Compared to 5 years ago, WDC has more shares outstanding
The debt/assets ratio for WDC is higher compared to a year ago.
2.2 Solvency
WDC has an Altman-Z score of 2.75. This is not the best score and indicates that WDC is in the grey zone with still only limited risk for bankruptcy at the moment.
WDC's Altman-Z score of 2.75 is fine compared to the rest of the industry. WDC outperforms 71.88% of its industry peers.
WDC has a debt to FCF ratio of 8.59. This is a slightly negative value and a sign of low solvency as WDC would need 8.59 years to pay back of all of its debts.
WDC has a Debt to FCF ratio (8.59) which is in line with its industry peers.
WDC has a Debt/Equity ratio of 0.91. This is a neutral value indicating WDC is somewhat dependend on debt financing.
WDC has a worse Debt to Equity ratio (0.91) than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 8.59 | ||
| Altman-Z | 2.75 |
ROIC/WACC1.96
WACC9.79%
2.3 Liquidity
WDC has a Current Ratio of 1.56. This is a normal value and indicates that WDC is financially healthy and should not expect problems in meeting its short term obligations.
WDC has a Current ratio (1.56) which is comparable to the rest of the industry.
A Quick Ratio of 1.31 indicates that WDC should not have too much problems paying its short term obligations.
WDC's Quick ratio of 1.31 is fine compared to the rest of the industry. WDC outperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
WDC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 267.11%, which is quite impressive.
The Revenue has decreased by -1.52% in the past year.
The Revenue has been decreasing by -4.73% on average over the past years.
EPS 1Y (TTM)267.11%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%115.87%
Revenue 1Y (TTM)-1.52%
Revenue growth 3Y-8.41%
Revenue growth 5Y-4.73%
Sales Q2Q%-33.64%
3.2 Future
The Earnings Per Share is expected to grow by 80.27% on average over the next years. This is a very strong growth
The Revenue is expected to decrease by -3.52% on average over the next years.
EPS Next Y1385.94%
EPS Next 2Y305.56%
EPS Next 3Y156.38%
EPS Next 5Y80.27%
Revenue Next Year-27.72%
Revenue Next 2Y-11.69%
Revenue Next 3Y-8.18%
Revenue Next 5Y-3.52%
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 8.77, which indicates a very decent valuation of WDC.
Based on the Price/Earnings ratio, WDC is valued cheaper than 90.63% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.31. WDC is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 10.15, which indicates a very decent valuation of WDC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WDC indicates a somewhat cheap valuation: WDC is cheaper than 71.88% of the companies listed in the same industry.
WDC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.77 | ||
| Fwd PE | 10.15 |
4.2 Price Multiples
WDC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. WDC is cheaper than 84.38% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WDC indicates a somewhat cheap valuation: WDC is cheaper than 65.63% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.75 | ||
| EV/EBITDA | 7.23 |
4.3 Compensation for Growth
WDC's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of WDC may justify a higher PE ratio.
A more expensive valuation may be justified as WDC's earnings are expected to grow with 156.38% in the coming years.
PEG (NY)0.01
PEG (5Y)N/A
EPS Next 2Y305.56%
EPS Next 3Y156.38%
5. Dividend
5.1 Amount
WDC has a yearly dividend return of 0.18%, which is pretty low.
Compared to an average industry Dividend Yield of 2.03, WDC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, WDC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.18% |
5.2 History
WDC has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DP0%
EPS Next 2Y305.56%
EPS Next 3Y156.38%
55.7
-0.08 (-0.14%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners104.34%
Inst Owner Change5.5%
Ins Owners0.46%
Ins Owner Change2.9%
Market Cap19.43B
Analysts80.67
Price Target59.88 (7.5%)
Short Float %9.22%
Short Ratio3.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.18% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)9.06%
Min EPS beat(2)-1.74%
Max EPS beat(2)19.85%
EPS beat(4)3
Avg EPS beat(4)10.66%
Min EPS beat(4)-1.74%
Max EPS beat(4)21.78%
EPS beat(8)7
Avg EPS beat(8)36.77%
EPS beat(12)9
Avg EPS beat(12)1.98%
EPS beat(16)13
Avg EPS beat(16)5.24%
Revenue beat(2)0
Avg Revenue beat(2)-1.92%
Min Revenue beat(2)-3.37%
Max Revenue beat(2)-0.46%
Revenue beat(4)0
Avg Revenue beat(4)-1.44%
Min Revenue beat(4)-3.37%
Max Revenue beat(4)-0.37%
Revenue beat(8)4
Avg Revenue beat(8)0.48%
Revenue beat(12)7
Avg Revenue beat(12)0.89%
Revenue beat(16)9
Avg Revenue beat(16)1.03%
PT rev (1m)-3.47%
PT rev (3m)-26.8%
EPS NQ rev (1m)0.14%
EPS NQ rev (3m)20.09%
EPS NY rev (1m)0%
EPS NY rev (3m)-16.64%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-15.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.77 | ||
| Fwd PE | 10.15 | ||
| P/S | 1.35 | ||
| P/FCF | 22.75 | ||
| P/OCF | 14.82 | ||
| P/B | 3.59 | ||
| P/tB | 19.22 | ||
| EV/EBITDA | 7.23 |
EPS(TTM)6.35
EY11.4%
EPS(NY)5.49
Fwd EY9.86%
FCF(TTM)2.45
FCFY4.39%
OCF(TTM)3.76
OCFY6.75%
SpS41.38
BVpS15.5
TBVpS2.9
PEG (NY)0.01
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.76% | ||
| ROE | 29.56% | ||
| ROCE | 24.32% | ||
| ROIC | 19.21% | ||
| ROICexc | 27.87% | ||
| ROICexgc | 64.84% | ||
| OM | 18.84% | ||
| PM (TTM) | 11.07% | ||
| GM | 36.93% | ||
| FCFM | 5.91% |
ROA(3y)-1.53%
ROA(5y)-0.49%
ROE(3y)-3.16%
ROE(5y)-0.89%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-40.84%
ROICexcg growth 5Y-8.79%
ROICexc growth 3Y-42.6%
ROICexc growth 5Y-9.08%
OM growth 3Y-39.35%
OM growth 5Y-7.63%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-5.72%
GM growth 5Y-0.75%
F-Score6
Asset Turnover0.88
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 8.59 | ||
| Debt/EBITDA | 1.52 | ||
| Cap/Depr | 90.85% | ||
| Cap/Sales | 3.17% | ||
| Interest Coverage | 7.35 | ||
| Cash Conversion | 40.68% | ||
| Profit Quality | 53.44% | ||
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.31 | ||
| Altman-Z | 2.75 |
F-Score6
WACC9.79%
ROIC/WACC1.96
Cap/Depr(3y)101.89%
Cap/Depr(5y)88.31%
Cap/Sales(3y)5.46%
Cap/Sales(5y)5.4%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)267.11%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%115.87%
EPS Next Y1385.94%
EPS Next 2Y305.56%
EPS Next 3Y156.38%
EPS Next 5Y80.27%
Revenue 1Y (TTM)-1.52%
Revenue growth 3Y-8.41%
Revenue growth 5Y-4.73%
Sales Q2Q%-33.64%
Revenue Next Year-27.72%
Revenue Next 2Y-11.69%
Revenue Next 3Y-8.18%
Revenue Next 5Y-3.52%
EBIT growth 1Y278.83%
EBIT growth 3Y-44.45%
EBIT growth 5Y-12%
EBIT Next Year568.48%
EBIT Next 3Y99.25%
EBIT Next 5Y48.54%
FCF growth 1Y183.16%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y3013.33%
OCF growth 3YN/A
OCF growth 5YN/A