NasdaqGS:WDC

Stock Analysis Report

Executive Summary

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions worldwide.

Rewards

Earnings are forecast to grow 102.63% per year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 2.89% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Reasonable growth potential unattractive dividend payer.


Similar Companies

Share Price & News

How has Western Digital's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WDC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.5%

WDC

2.5%

US Tech

2.0%

US Market


1 Year Return

74.1%

WDC

95.2%

US Tech

23.6%

US Market

Return vs Industry: WDC underperformed the US Tech industry which returned 96.6% over the past year.

Return vs Market: WDC exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

WDCIndustryMarket
7 Day0.5%2.5%2.0%
30 Day16.1%13.1%3.9%
90 Day17.4%32.7%12.0%
1 Year81.1%74.1%98.4%95.2%26.2%23.6%
3 Year3.5%-6.0%157.6%139.0%53.2%43.3%
5 Year-24.4%-35.7%176.7%148.5%75.7%56.3%

Price Volatility Vs. Market

How volatile is Western Digital's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Western Digital undervalued compared to its fair value and its price relative to the market?

2.13x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: WDC ($69.21) is trading above our estimate of fair value ($53.47)

Significantly Below Fair Value: WDC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: WDC is unprofitable, so we can't compare its PE Ratio to the Tech industry average.

PE vs Market: WDC is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate WDC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: WDC is overvalued based on its PB Ratio (2.2x) compared to the US Tech industry average (1.9x).


Next Steps

Future Growth

How is Western Digital forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

102.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WDC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: WDC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: WDC's is expected to become profitable in the next 3 years.

Revenue vs Market: WDC's revenue (7.7% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: WDC's revenue (7.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WDC's Return on Equity is forecast to be low in 3 years time (19%).


Next Steps

Past Performance

How has Western Digital performed over the past 5 years?

-44.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WDC is currently unprofitable.

Growing Profit Margin: WDC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: WDC is unprofitable, and losses have increased over the past 5 years at a rate of -44.4% per year.

Accelerating Growth: Unable to compare WDC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: WDC is unprofitable, making it difficult to compare its past year earnings growth to the Tech industry (25.2%).


Return on Equity

High ROE: WDC has a negative Return on Equity (-16.11%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Western Digital's financial position?


Financial Position Analysis

Short Term Liabilities: WDC's short term assets ($8.5B) exceed its short term liabilities ($4.3B).

Long Term Liabilities: WDC's short term assets ($8.5B) do not cover its long term liabilities ($12.4B).


Debt to Equity History and Analysis

Debt Level: WDC's debt to equity ratio (106.8%) is considered high.

Reducing Debt: WDC's debt to equity ratio has increased from 26.8% to 106.8% over the past 5 years.

Debt Coverage: WDC's debt is not well covered by operating cash flow (10.7%).

Interest Coverage: Insufficient data to determine if WDC's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: WDC has a high level of physical assets or inventory.

Debt Coverage by Assets: WDC's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Western Digital's current dividend yield, its reliability and sustainability?

2.93%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.1%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: WDC's dividend (2.89%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: WDC's dividend (2.89%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, WDC has been paying a dividend for less than 10 years.

Growing Dividend: WDC's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: WDC is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: WDC's dividends in 3 years are forecast to be well covered by earnings (28.3% payout ratio).


Next Steps

Management

What is the CEO of Western Digital's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

Steve Milligan (56yo)

7yrs

Tenure

US$12,866,469

Compensation

Mr. Stephen D. Milligan, also known as Steve, has been the Chief Executive Officer of Western Digital Corporation since January 2, 2013 and served as its President from January 1, 2013 to October 18, 2015. ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD12.87M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.2yrs

Average Tenure

55.5yo

Average Age

Experienced Management: WDC's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

4.2yrs

Average Tenure

61yo

Average Age

Experienced Board: WDC's board of directors are considered experienced (4.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$195,57522 Aug 19
Lori Sundberg
EntityIndividual
Shares3,442
Max PriceUS$56.82

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Dave Tang (54yo)

    Senior Vice President of Corporate Marketing

    • Tenure: 2.8yrs
  • Michael Ray (51yo)

    Chief Legal Officer

    • Tenure: 9.3yrs
    • Compensation: US$4.58m
  • C. Wesley Scott

    Chief Investment Officer

    • Bob Eulau (57yo)

      Executive VP & CFO

      • Tenure: 0.7yrs
      • Compensation: US$2.39m
    • Steve Milligan (56yo)

      CEO & Director

      • Tenure: 7yrs
      • Compensation: US$12.87m
    • Mike Cordano (55yo)

      President & COO

      • Tenure: 4.3yrs
      • Compensation: US$5.48m
    • Martin Fink (54yo)

      • Tenure: 0.3yrs
      • Compensation: US$2.95m
    • Siva Sivaram (59yo)

      President of Technology & Strategy

      • Tenure: 3.7yrs
      • Compensation: US$3.67m
    • T. Peter Andrew

      Vice President of Investor Relations

      • Gene Zamiska (57yo)

        Vice President of Global Accounting & Chief Accounting Officer

        • Tenure: 0.4yrs

      Board Members

      • Tunç Doluca (61yo)

        Independent Director

        • Tenure: 1.4yrs
        • Compensation: US$376.50k
      • Matt Massengill (58yo)

        Independent Chairman

        • Tenure: 4.2yrs
        • Compensation: US$464.97k
      • Kath Cote (70yo)

        Independent Director

        • Tenure: 19yrs
        • Compensation: US$337.48k
      • Stephanie Streeter (61yo)

        Independent Director

        • Tenure: 1.2yrs
        • Compensation: US$324.61k
      • Len Lauer (62yo)

        Lead Independent Director

        • Tenure: 4.2yrs
        • Compensation: US$402.47k
      • Steve Milligan (56yo)

        CEO & Director

        • Tenure: 7yrs
        • Compensation: US$12.87m
      • Marty Cole (63yo)

        Independent Director

        • Tenure: 5.1yrs
        • Compensation: US$339.98k
      • Kimberly Alexy (49yo)

        Independent Director

        • Tenure: 1.2yrs
        • Compensation: US$317.27k

      Company Information

      Western Digital Corporation's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Western Digital Corporation
      • Ticker: WDC
      • Exchange: NasdaqGS
      • Founded: 1970
      • Industry: Technology Hardware, Storage and Peripherals
      • Sector: Tech
      • Market Cap: US$20.301b
      • Shares outstanding: 297.40m
      • Website: https://www.westerndigital.com

      Number of Employees


      Location

      • Western Digital Corporation
      • 5601 Great Oaks Parkway
      • San Jose
      • California
      • 95119
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      WDCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1973
      WDCDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1973
      WDCXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1973
      WDC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1973
      WDCSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1973
      0QZFLSE (London Stock Exchange)YesCommon StockGBUSDJan 1973
      WDCWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1973
      WDCETLX (Eurotlx)YesCommon StockITEURJan 1973
      W1DC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLJan 2020

      Biography

      Western Digital Corporation develops, manufactures, and sells data storage devices and solutions worldwide. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for computing devices, such as desktop and notebook personal computers (PCs), security surveillance systems, gaming consoles, and set top boxes; flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications; flash-based memory wafers; and embedded storage solutions and flash products, such as multi-chip package solutions. The company also provides data center devices and solutions comprising enterprise helium hard drives; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; data center solutions, including HDDs and drive configurations for use in data storage systems and tiered storage models; system solutions that offer petabyte scalable capacity; and data storage platforms and systems. In addition, it offers client solutions, such as external HDD storage products in mobile and desktop form; client SSDs; removable cards that are used in consumer devices comprising mobile phones, tablets, imaging systems, still and action video cameras, and security surveillance systems; universal serial bus flash drives for use in the computing and consumer markets; and wireless drive products used in-field back up of created content, as well as wireless streaming of high-definition movies, photos, music, and documents to tablets, smartphones, and PCs. The company sells its products under the HGST, SanDisk, and WD brands to original equipment manufacturers, distributors, resellers, cloud infrastructure players, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/18 23:46
      End of Day Share Price2020/01/17 00:00
      Earnings2019/10/04
      Annual Earnings2019/06/28


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.