Western Digital (WDC): Is the Recent Rally Justified by Its Current Valuation?

Western Digital (WDC) has quietly turned into one of the market’s stronger long term rebound stories, with the stock up roughly 76% over the past 3 months and more than tripling over the past year.

See our latest analysis for Western Digital.

That surge has been driven less by a single headline than by a steady reset in expectations, as investors increasingly price in stronger storage demand and improving margins while Western Digital’s powerful 1 year total shareholder return signals that momentum is still very much building.

If Western Digital’s run has you thinking about where else growth and sentiment might be lining up, it could be worth exploring high growth tech and AI stocks as your next hunting ground.

Yet with Western Digital now trading just below analyst targets but still at a notable discount to some intrinsic value estimates, investors have to ask: Is there still a buying opportunity here, or has the market already priced in the growth?

Most Popular Narrative: 6.6% Undervalued

Against a last close of $169.54, the most followed narrative pegs Western Digital’s fair value materially higher and implies the market has not fully caught up.

The analysts have a consensus price target of $89.143 for Western Digital based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $110.0, and the most bearish reporting a price target of just $62.0.

Read the complete narrative.

Want to see how moderate growth, fatter margins, and a lower future multiple still add up to potential upside from here? The valuation math might surprise you.

Result: Fair Value of $181.43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heavy reliance on a few hyperscale customers and rapid shifts toward alternative storage technologies could quickly challenge the bullish growth and margin narrative.

Find out about the key risks to this Western Digital narrative.

Build Your Own Western Digital Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just a few minutes: Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Western Digital.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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