Why the Market Dipped But Western Digital (WDC) Gained Today

In the latest trading session, Western Digital (WDC) closed at $477.30, marking a +2.1% move from the previous day. The stock's change was more than the S&P 500's daily loss of 0.58%. Meanwhile, the Dow lost 1.18%, and the Nasdaq, a tech-heavy index, lost 0.32%.

Shares of the maker of hard drives for businesses and personal computers have appreciated by 6.64% over the course of the past month, outperforming the Computer and Technology sector's gain of 0.12%, and the S&P 500's loss of 0.36%.

Investors will be eagerly watching for the performance of Western Digital in its upcoming earnings disclosure. The company's upcoming EPS is projected at $4.07, signifying a 128.65% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $4.16 billion, indicating a 47.45% growth compared to the corresponding quarter of the prior year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $20.03 per share and revenue of $18.78 billion, indicating changes of +95.99% and +45.39%, respectively, compared to the previous year.

Any recent changes to analyst estimates for Western Digital should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Western Digital currently has a Zacks Rank of #2 (Buy).

In terms of valuation, Western Digital is presently being traded at a Forward P/E ratio of 23.33. This denotes a premium relative to the industry average Forward P/E of 10.36.

It's also important to note that WDC currently trades at a PEG ratio of 1.94. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer- Storage Devices was holding an average PEG ratio of 1.38 at yesterday's closing price.

The Computer- Storage Devices industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 21, placing it within the top 9% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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