279.7 USD
+27.04 (+10.7%)
292 USD
+12.3 (+4.4%)
We assign a fundamental rating of 5 out of 10 to WDC. WDC was compared to 35 industry peers in the Technology Hardware, Storage & Peripherals industry. While WDC belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, WDC is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year WDC was profitable.
- WDC had a positive operating cash flow in the past year.
- 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
- The Return On Assets of WDC (17.50%) is better than 91.43% of its industry peers.
- The Return On Equity of WDC (41.08%) is better than 91.43% of its industry peers.
- With an excellent Return On Invested Capital value of 24.17%, WDC belongs to the best of the industry, outperforming 91.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.5% | ||
| ROE | 41.08% | ||
| ROIC | 24.17% |
ROA(3y)0.89%
ROA(5y)2.34%
ROE(3y)3.69%
ROE(5y)6.28%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- The Profit Margin of WDC (20.94%) is better than 97.14% of its industry peers.
- WDC's Profit Margin has improved in the last couple of years.
- WDC has a Operating Margin of 23.42%. This is amongst the best in the industry. WDC outperforms 94.29% of its industry peers.
- WDC's Operating Margin has improved in the last couple of years.
- WDC has a better Gross Margin (39.34%) than 77.14% of its industry peers.
- In the last couple of years the Gross Margin of WDC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.42% | ||
| PM (TTM) | 20.94% | ||
| GM | 39.34% |
OM growth 3Y16.77%
OM growth 5Y53.81%
PM growth 3Y32.94%
PM growth 5YN/A
GM growth 3Y6.22%
GM growth 5Y11.02%
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.
- WDC has more shares outstanding than it did 1 year ago.
- WDC has more shares outstanding than it did 5 years ago.
- Compared to 1 year ago, WDC has a worse debt to assets ratio.
2.2 Solvency
- WDC has an Altman-Z score of 8.72. This indicates that WDC is financially healthy and has little risk of bankruptcy at the moment.
- With an excellent Altman-Z score value of 8.72, WDC belongs to the best of the industry, outperforming 88.57% of the companies in the same industry.
- The Debt to FCF ratio of WDC is 2.33, which is a good value as it means it would take WDC, 2.33 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 2.33, WDC is in the better half of the industry, outperforming 77.14% of the companies in the same industry.
- WDC has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
- WDC has a Debt to Equity ratio (0.40) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.33 | ||
| Altman-Z | 8.72 |
ROIC/WACC2.8
WACC8.63%
2.3 Liquidity
- A Current Ratio of 1.21 indicates that WDC should not have too much problems paying its short term obligations.
- WDC has a Current ratio (1.21) which is comparable to the rest of the industry.
- A Quick Ratio of 0.94 indicates that WDC may have some problems paying its short term obligations.
- WDC has a Quick ratio (0.94) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 107.91% over the past year.
- Measured over the past years, WDC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.66% on average per year.
- WDC shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -29.80%.
- WDC shows a very negative growth in Revenue. Measured over the last years, the Revenue has been decreasing by -10.67% yearly.
EPS 1Y (TTM)107.91%
EPS 3Y-7.2%
EPS 5Y16.66%
EPS Q2Q%0%
Revenue 1Y (TTM)-29.8%
Revenue growth 3Y-20.28%
Revenue growth 5Y-10.67%
Sales Q2Q%-31.18%
3.2 Future
- Based on estimates for the next years, WDC will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.20% on average per year.
- The Revenue is expected to grow by 12.63% on average over the next years. This is quite good.
EPS Next Y19.19%
EPS Next 2Y23.35%
EPS Next 3Y22.25%
EPS Next 5Y13.2%
Revenue Next Year26.08%
Revenue Next 2Y21.59%
Revenue Next 3Y17.46%
Revenue Next 5Y12.63%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- 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
- Based on the Price/Earnings ratio of 42.57, the valuation of WDC can be described as expensive.
- WDC's Price/Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, WDC is valued a bit more expensive.
- With a Price/Forward Earnings ratio of 27.98, WDC can be considered very expensive at the moment.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of WDC is on the same level as its industry peers.
- WDC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.57 | ||
| Fwd PE | 27.98 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as WDC.
- The rest of the industry has a similar Price/Free Cash Flow ratio as WDC.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 47.55 | ||
| EV/EBITDA | 29.96 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates WDC does not grow enough to justify the current Price/Earnings ratio.
- WDC has a very decent profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as WDC's earnings are expected to grow with 22.25% in the coming years.
PEG (NY)2.22
PEG (5Y)2.55
EPS Next 2Y23.35%
EPS Next 3Y22.25%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.21%, WDC is not a good candidate for dividend investing.
- WDC's Dividend Yield is a higher than the industry average which is at 0.65.
- With a Dividend Yield of 0.21, WDC pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.21% |
5.2 History
- The dividend of WDC decreases each year by -42.40%.
- WDC has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-42.4%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- WDC pays out 3.30% of its income as dividend. This is a sustainable payout ratio.
DP3.3%
EPS Next 2Y23.35%
EPS Next 3Y22.25%
WESTERN DIGITAL CORP / WDC FAQ
Can you provide the ChartMill fundamental rating for WESTERN DIGITAL CORP?
ChartMill assigns a fundamental rating of 5 / 10 to WDC.
What is the valuation status of WESTERN DIGITAL CORP (WDC) stock?
ChartMill assigns a valuation rating of 3 / 10 to WESTERN DIGITAL CORP (WDC). This can be considered as Overvalued.
Can you provide the profitability details for WESTERN DIGITAL CORP?
WESTERN DIGITAL CORP (WDC) has a profitability rating of 7 / 10.
Can you provide the financial health for WDC stock?
The financial health rating of WESTERN DIGITAL CORP (WDC) is 5 / 10.
How sustainable is the dividend of WESTERN DIGITAL CORP (WDC) stock?
The dividend rating of WESTERN DIGITAL CORP (WDC) is 3 / 10 and the dividend payout ratio is 3.3%.