Western Digital has an attractive valuation and strong overall fundamentals.
Analysts have given Western Digital stock no Sell ratings, 10 Hold ratings, 25 Buy ratings, and 1 Strong Buy rating. The average price target is $109 which represents 17.47% upside from the current price.
Western Digital is benefiting from strong demand for both hard drive and NAND-based products largely driven by cloud and mobility based applications. The company recently acquired Upthere and Tegile Systems which in expanding its presence with a wider range of products and solutions.
Western Digital Corporation (Western Digital) is a developer, manufacturer and provider of data storage devices and solutions that address the needs of the information technology industry and the infrastructure that enables the proliferation of data in virtually every industry. You can read more about the company on their website.
Western Digital Stock
For a short term swing trade, Western Digital stock does not present a quality setup at the moment. Price movement has been a little bit too volatile to find a good entry and exit point. It is probably a good idea to wait for a consolidation or candle over candle reversal first.
For a long-term value play, Western Digital looks like a good entry.
Western Digital Corporation Review
WDC has a Return On Assets of 4.73%. This is better than the industry average of 1.84%. WDC has a Profit Margin of 7.38%. This is better than the industry average of 1.30%. WDC has a very good Piotroski-F score of 8. This indicates a great health and profitability for WDC. WDC has a Return On Equity of 11.97%. This is comparable to the industry average of 11.97%.
WDC's Price/Earning Ratio is a bit cheaper than the industry average which is at 22.33. The Forward Price/Earnings Ratio of 7.22 indicates a rather cheap valuation of WDC. The low PEG Ratio, which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company. When comparing the price book ratio of WDC to the average industry price book ratio of 3.20, WDC is valued rather cheaply. Compared to an average Enterprise Value to EBITDA ratio of 13.64, WDC is valued rather cheaply. On top of this, WDC has a better ratio than 93% of the companies listed in the same industry. The Price/Earnings Ratio is 16.09, which indicates a correct valuation of WDC. When comparing the current price to the book value of WDC, we can conclude it is valued correctly. It is trading at 1.91 times its book value.
WDC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 424.78%, which is quite impressive. WDC is expected to show a strong growth in Earnings Per Share. In the coming 2 years, the EPS will grow by 183.90% yearly. Looking at the last year, WDC shows a very strong growth in revenue. Revenue has grown by 36.33%. The Earnings Per Share has been growing slightly by 4.02% on average over the past 5 years. Revenue has been growing slightly by 4.97% on average over the past 5 years. The EPS growth is decreasing: in the next 2 years the growth will be less than in the last years.
WDC has a Current Ratio of 2.64. This indicates that WDC is financially healthy and has no problem in meeting its short term obligations. WDC is better placed than average in its industry to meet its short term obligations. Its Current Ratio is much better than the industry average of 1.75. A Quick Ratio of 2.13 indicates that WDC has no problem at all paying its short term obligations. The Quick Ratio of WDC is much better than the industry average of 1.36. The Piotroski-F score of WDC is 8. This is a very strong score and indicates great health and profitability for WDC. WDC has an Altman-Z score of 2.20. 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 has a Altman-Z score comparable to the industry average, which is at 2.20. WDC has one of the worst Debt to Equity ratios in its industry. 87% of its industry peers require less debt for financing their operations.
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