WESTERN DIGITAL CORP (WDC) Stock Fundamental Analysis
NASDAQ:WDC - Nasdaq - US9581021055 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to WDC. WDC was compared to 32 industry peers in the Technology Hardware, Storage & Peripherals industry. There are concerns on the financial health of WDC while its profitability can be described as average. WDC may be a bit undervalued, certainly considering the very reasonable score on growth
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.
In multiple years WDC reported negative operating cash flow during the last 5 years.
1.2 Ratios
WDC has a better Return On Assets (4.73%) than 74.19% of its industry peers.
The Return On Equity of WDC (9.75%) is better than 80.65% of its industry peers.
WDC has a Return On Invested Capital of 9.38%. This is in the better half of the industry: WDC outperforms 67.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.73% | ||
| ROE | 9.75% | ||
| ROIC | 9.38% |
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 7.72% is fine compared to the rest of the industry. WDC outperforms 77.42% of its industry peers.
WDC's Operating Margin of 15.80% is amongst the best of the industry. WDC outperforms 87.10% of its industry peers.
WDC's Operating Margin has declined in the last couple of years.
WDC has a Gross Margin of 34.75%. This is in the better half of the industry: WDC outperforms 64.52% 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 | 15.8% | ||
| PM (TTM) | 7.72% | ||
| GM | 34.75% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WDC is creating some value.
Compared to 1 year ago, WDC has more shares outstanding
The number of shares outstanding for WDC has been increased compared to 5 years ago.
The debt/assets ratio for WDC is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.72 indicates that WDC is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of WDC (2.72) is better than 64.52% of its industry peers.
WDC has a debt to FCF ratio of 16.89. This is a negative value and a sign of low solvency as WDC would need 16.89 years to pay back of all of its debts.
With a Debt to FCF ratio value of 16.89, WDC perfoms like the industry average, outperforming 45.16% of the companies in the same industry.
WDC has a Debt/Equity ratio of 0.58. This is a neutral value indicating WDC is somewhat dependend on debt financing.
WDC has a Debt to Equity ratio of 0.58. This is comparable to the rest of the industry: WDC outperforms 45.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 16.89 | ||
| Altman-Z | 2.72 |
ROIC/WACC1.16
WACC8.07%
2.3 Liquidity
A Current Ratio of 1.99 indicates that WDC should not have too much problems paying its short term obligations.
WDC has a Current ratio of 1.99. This is comparable to the rest of the industry: WDC outperforms 58.06% of its industry peers.
A Quick Ratio of 1.26 indicates that WDC should not have too much problems paying its short term obligations.
WDC has a Quick ratio of 1.26. This is comparable to the rest of the industry: WDC outperforms 58.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.26 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 196.90% over the past year.
Looking at the last year, WDC shows a quite strong growth in Revenue. The Revenue has grown by 11.38% 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)196.9%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%356.52%
Revenue 1Y (TTM)11.38%
Revenue growth 3Y-8.41%
Revenue growth 5Y-4.73%
Sales Q2Q%41.33%
3.2 Future
WDC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 83.43% yearly.
WDC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.42% yearly.
EPS Next Y1640.31%
EPS Next 2Y361.83%
EPS Next 3Y182.26%
EPS Next 5Y83.43%
Revenue Next Year25.18%
Revenue Next 2Y16.63%
Revenue Next 3Y11.84%
Revenue Next 5Y9.42%
3.3 Evolution
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
WDC is valuated correctly with a Price/Earnings ratio of 12.23.
Based on the Price/Earnings ratio, WDC is valued cheaper than 80.65% of the companies in the same industry.
When comparing the Price/Earnings ratio of WDC to the average of the S&P500 Index (30.30), we can say WDC is valued rather cheaply.
The Price/Forward Earnings ratio is 9.35, which indicates a very decent valuation of WDC.
Based on the Price/Forward Earnings ratio, WDC is valued cheaper than 87.10% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WDC to the average of the S&P500 Index (23.06), we can say WDC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.23 | ||
| Fwd PE | 9.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WDC is valued a bit cheaper than the industry average as 77.42% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WDC is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.81 | ||
| EV/EBITDA | 9.96 |
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's earnings are expected to grow with 182.26% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.01
PEG (5Y)N/A
EPS Next 2Y361.83%
EPS Next 3Y182.26%
5. Dividend
5.1 Amount
No dividends for WDC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
68.705
-2.59 (-3.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners99.63%
Inst Owner Change3.99%
Ins Owners0.27%
Ins Owner Change0.22%
Market Cap23.90B
Analysts78.06
Price Target88.23 (28.42%)
Short Float %6.98%
Short Ratio3.99
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.51%
Min EPS beat(2)-1.74%
Max EPS beat(2)2.75%
EPS beat(4)3
Avg EPS beat(4)55.86%
Min EPS beat(4)-1.74%
Max EPS beat(4)200.65%
EPS beat(8)7
Avg EPS beat(8)35.99%
EPS beat(12)9
Avg EPS beat(12)1.21%
EPS beat(16)13
Avg EPS beat(16)6.99%
Revenue beat(2)0
Avg Revenue beat(2)-1.01%
Min Revenue beat(2)-1.56%
Max Revenue beat(2)-0.46%
Revenue beat(4)1
Avg Revenue beat(4)-0.14%
Min Revenue beat(4)-1.56%
Max Revenue beat(4)1.86%
Revenue beat(8)5
Avg Revenue beat(8)1.25%
Revenue beat(12)8
Avg Revenue beat(12)1.19%
Revenue beat(16)10
Avg Revenue beat(16)1.43%
PT rev (1m)-4.79%
PT rev (3m)-0.64%
EPS NQ rev (1m)-41.45%
EPS NQ rev (3m)-50.71%
EPS NY rev (1m)-22.05%
EPS NY rev (3m)-22.9%
Revenue NQ rev (1m)-7.36%
Revenue NQ rev (3m)-14.96%
Revenue NY rev (1m)-3.21%
Revenue NY rev (3m)-4.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.23 | ||
| Fwd PE | 9.35 | ||
| P/S | 1.53 | ||
| P/FCF | 54.81 | ||
| P/OCF | 27.75 | ||
| P/B | 1.94 | ||
| P/tB | 9.41 | ||
| EV/EBITDA | 9.96 |
EPS(TTM)5.62
EY8.18%
EPS(NY)7.34
Fwd EY10.69%
FCF(TTM)1.25
FCFY1.82%
OCF(TTM)2.48
OCFY3.6%
SpS44.85
BVpS35.5
TBVpS7.3
PEG (NY)0.01
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.73% | ||
| ROE | 9.75% | ||
| ROCE | 11.88% | ||
| ROIC | 9.38% | ||
| ROICexc | 10.55% | ||
| ROICexgc | 22.5% | ||
| OM | 15.8% | ||
| PM (TTM) | 7.72% | ||
| GM | 34.75% | ||
| FCFM | 2.79% |
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-Score7
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 16.89 | ||
| Debt/EBITDA | 2.41 | ||
| Cap/Depr | 79.74% | ||
| Cap/Sales | 2.72% | ||
| Interest Coverage | 6.3 | ||
| Cash Conversion | 28.72% | ||
| Profit Quality | 36.21% | ||
| Current Ratio | 1.99 | ||
| Quick Ratio | 1.26 | ||
| Altman-Z | 2.72 |
F-Score7
WACC8.07%
ROIC/WACC1.16
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)196.9%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%356.52%
EPS Next Y1640.31%
EPS Next 2Y361.83%
EPS Next 3Y182.26%
EPS Next 5Y83.43%
Revenue 1Y (TTM)11.38%
Revenue growth 3Y-8.41%
Revenue growth 5Y-4.73%
Sales Q2Q%41.33%
Revenue Next Year25.18%
Revenue Next 2Y16.63%
Revenue Next 3Y11.84%
Revenue Next 5Y9.42%
EBIT growth 1Y209.22%
EBIT growth 3Y-44.45%
EBIT growth 5Y-12%
EBIT Next Year761.55%
EBIT Next 3Y111.8%
EBIT Next 5Y60.68%
FCF growth 1Y205.06%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y17.3%
OCF growth 3YN/A
OCF growth 5YN/A