Western Digital Corporation
Western Digital Corporation Fundamental Analysis
Western Digital Corporation (WDC) shows strong financial fundamentals with a PE ratio of 25.74, profit margin of 55.07%, and ROE of 91.94%. The company generates $11.8B in annual revenue with strong year-over-year growth of 50.70%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 93.3/100 based on profitability, valuation, growth, and balance sheet metrics. The A grade reflects excellent fundamentals and strong overall stability.
Fundamental Health Score
We analyze WDC's fundamental strength across five key dimensions:
Efficiency Score
ExcellentWDC demonstrates superior asset utilization.
Valuation Score
ModerateWDC shows balanced valuation metrics.
Growth Score
ModerateWDC shows steady but slowing expansion.
Financial Health Score
ExcellentWDC maintains a strong and stable balance sheet.
Profitability Score
ExcellentWDC achieves industry-leading margins.
Key Financial Metrics
Is WDC Expensive or Cheap?
P/E Ratio
WDC trades at 25.74 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, WDC's PEG of 0.08 indicates potential undervaluation.
Price to Book
The market values Western Digital Corporation at 17.25 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 31.35 times EBITDA. This signals the market has high growth expectations.
How Well Does WDC Make Money?
Net Profit Margin
For every $100 in sales, Western Digital Corporation keeps $55.07 as profit after all expenses.
Operating Margin
Core operations generate 30.78 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $91.94 in profit for every $100 of shareholder equity.
ROA
Western Digital Corporation generates $43.11 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Western Digital Corporation generates strong operating cash flow of $3.28B, reflecting robust business health.
Free Cash Flow
Western Digital Corporation generates strong free cash flow of $2.90B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.42 in free cash annually.
FCF Yield
WDC converts 1.75% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
25.74
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.08
vs 25 benchmark
P/B Ratio
Price to book value ratio
17.25
vs 25 benchmark
P/S Ratio
Price to sales ratio
14.17
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.18
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.49
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.92
vs 25 benchmark
ROA
Return on assets percentage
0.43
vs 25 benchmark
ROCE
Return on capital employed
0.35
vs 25 benchmark
How WDC Stacks Against Its Sector Peers
| Metric | WDC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 25.74 | 36.81 | Better (Cheaper) |
| ROE | 91.94% | 974.00% | Weak |
| Net Margin | 55.07% | 5914823191.00% | Weak |
| Debt/Equity | 0.18 | 0.34 | Strong (Low Leverage) |
| Current Ratio | 1.49 | 4.93 | Neutral |
| ROA | 43.11% | -294975.00% (disorted) | Strong |
WDC outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Western Digital Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-51.15%
Industry Style: Growth, Innovation, High Beta
DecliningEPS CAGR
739.28%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
76.24%
Industry Style: Growth, Innovation, High Beta
High Growth