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. WDC has a medium profitability rating, but doesn't score so well on its financial health evaluation. WDC has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year WDC was profitable.
In the past year WDC had a positive cash flow from operations.
In multiple years WDC reported negative net income over the last 5 years.
The reported operating cash flow has been mixed in the past 5 years: WDC reported negative operating cash flow in multiple years.
1.2 Ratios
With an excellent Return On Assets value of 9.76%, WDC belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
WDC's Return On Equity of 29.56% is amongst the best of the industry. WDC outperforms 90.63% of its industry peers.
With an excellent Return On Invested Capital value of 19.21%, WDC belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
| 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
WDC's Profit Margin of 11.07% is amongst the best of the industry. WDC outperforms 84.38% of its industry peers.
WDC has a Operating Margin of 18.84%. This is amongst the best in the industry. WDC outperforms 84.38% of its industry peers.
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.
In the last couple of years the Gross Margin of WDC has remained more or less at the same level.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so WDC is creating value.
Compared to 1 year ago, WDC has more shares outstanding
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
The Debt to FCF ratio of WDC is 8.54, which is on the high side as it means it would take WDC, 8.54 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.54, WDC is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
A Debt/Equity ratio of 0.91 indicates that WDC is somewhat dependend on debt financing.
WDC has a Debt to Equity ratio (0.91) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 8.54 | ||
| Altman-Z | N/A |
ROIC/WACC2.56
WACC7.49%
2.3 Liquidity
A Current Ratio of 1.56 indicates that WDC should not have too much problems paying its short term obligations.
With a Current ratio value of 1.56, WDC perfoms like the industry average, outperforming 53.13% of the companies in the same industry.
WDC has a Quick Ratio of 1.31. This is a normal value and indicates that WDC is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of WDC (1.31) is better than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 267.11% over the past year.
Looking at the last year, WDC shows a decrease in Revenue. The Revenue has decreased by -1.52% in the last year.
Measured over the past years, WDC shows a decrease in Revenue. The Revenue has been decreasing by -4.73% on average per year.
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
Based on estimates for the next years, WDC will show a very strong growth in Earnings Per Share. The EPS will grow by 83.47% on average per year.
The Revenue is expected to decrease by -5.09% on average over the next years.
EPS Next Y1343.47%
EPS Next 2Y285.12%
EPS Next 3Y152.86%
EPS Next 5Y83.47%
Revenue Next Year-19.57%
Revenue Next 2Y-13.97%
Revenue Next 3Y-6.06%
Revenue Next 5Y-5.09%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 7.04, which indicates a rather cheap valuation of WDC.
Compared to the rest of the industry, the Price/Earnings ratio of WDC indicates a rather cheap valuation: WDC is cheaper than 90.63% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.22. WDC is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 9.17, the valuation of WDC can be described as very reasonable.
Based on the Price/Forward Earnings ratio, WDC is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.86. WDC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.04 | ||
| Fwd PE | 9.17 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WDC indicates a rather cheap valuation: WDC is cheaper than 90.63% of the companies listed in the same industry.
75.00% of the companies in the same industry are more expensive than WDC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.1 | ||
| EV/EBITDA | 5.94 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
WDC has a very decent profitability rating, which may justify a higher PE ratio.
WDC's earnings are expected to grow with 152.86% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.01
PEG (5Y)N/A
EPS Next 2Y285.12%
EPS Next 3Y152.86%
5. Dividend
5.1 Amount
With a yearly dividend of 0.22%, WDC is not a good candidate for dividend investing.
The stock price of WDC dropped by -31.38% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
WDC's Dividend Yield is a higher than the industry average which is at 3.16.
Compared to an average S&P500 Dividend Yield of 2.44, WDC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.22% |
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 2Y285.12%
EPS Next 3Y152.86%
44.69
+0.74 (+1.68%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners99%
Inst Owner Change0.03%
Ins Owners0.22%
Ins Owner Change1.96%
Market Cap15.54B
Analysts80
Price Target66.27 (48.29%)
Short Float %8.83%
Short Ratio3.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.22% |
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)8.48%
Min EPS beat(2)-1.74%
Max EPS beat(2)18.69%
EPS beat(4)3
Avg EPS beat(4)10.37%
Min EPS beat(4)-1.74%
Max EPS beat(4)21.78%
EPS beat(8)7
Avg EPS beat(8)36.62%
EPS beat(12)9
Avg EPS beat(12)1.88%
EPS beat(16)13
Avg EPS beat(16)5.17%
Revenue beat(2)0
Avg Revenue beat(2)-3.3%
Min Revenue beat(2)-6.14%
Max Revenue beat(2)-0.46%
Revenue beat(4)0
Avg Revenue beat(4)-2.13%
Min Revenue beat(4)-6.14%
Max Revenue beat(4)-0.37%
Revenue beat(8)4
Avg Revenue beat(8)0.13%
Revenue beat(12)7
Avg Revenue beat(12)0.66%
Revenue beat(16)9
Avg Revenue beat(16)0.85%
PT rev (1m)-18.99%
PT rev (3m)-28.49%
EPS NQ rev (1m)1.24%
EPS NQ rev (3m)-36.1%
EPS NY rev (1m)-2.89%
EPS NY rev (3m)-37.07%
Revenue NQ rev (1m)-2.2%
Revenue NQ rev (3m)-41.96%
Revenue NY rev (1m)-5.85%
Revenue NY rev (3m)-37.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.04 | ||
| Fwd PE | 9.17 | ||
| P/S | 1.08 | ||
| P/FCF | 18.1 | ||
| P/OCF | 11.86 | ||
| P/B | 2.88 | ||
| P/tB | 15.37 | ||
| EV/EBITDA | 5.94 |
EPS(TTM)6.35
EY14.21%
EPS(NY)4.88
Fwd EY10.91%
FCF(TTM)2.47
FCFY5.53%
OCF(TTM)3.77
OCFY8.43%
SpS41.51
BVpS15.54
TBVpS2.91
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 | 5.95% |
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 | 8.54 | ||
| Debt/EBITDA | 1.52 | ||
| Cap/Depr | 89.86% | ||
| Cap/Sales | 3.13% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 40.68% | ||
| Profit Quality | 53.75% | ||
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.31 | ||
| Altman-Z | N/A |
F-Score6
WACC7.49%
ROIC/WACC2.56
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 Y1343.47%
EPS Next 2Y285.12%
EPS Next 3Y152.86%
EPS Next 5Y83.47%
Revenue 1Y (TTM)-1.52%
Revenue growth 3Y-8.41%
Revenue growth 5Y-4.73%
Sales Q2Q%-33.64%
Revenue Next Year-19.57%
Revenue Next 2Y-13.97%
Revenue Next 3Y-6.06%
Revenue Next 5Y-5.09%
EBIT growth 1Y278.83%
EBIT growth 3Y-44.45%
EBIT growth 5Y-12%
EBIT Next Year611.47%
EBIT Next 3Y89.26%
EBIT Next 5Y47.82%
FCF growth 1Y183.64%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y3013.33%
OCF growth 3YN/A
OCF growth 5YN/A