Western Digital Corporation Stock Buy Recommendation Reiterated (WDC)

NEW YORK (TheStreet) -- Western Digital Corporation (Nasdaq:WDC) has been reitereated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, attractive valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

• The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 230.8% when compared to the same quarter one year prior, rising from $146.00 million to $483.00 million.
• WDC's revenue growth trails the industry average of 59.2%. Since the same quarter one year prior, revenues rose by 34.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
• Net operating cash flow has significantly increased by 285.94% to $1,208.00 million when compared to the same quarter last year. In addition, WESTERN DIGITAL CORP has also vastly surpassed the industry average cash flow growth rate of 126.20%.
• 38.40% is the gross profit margin for WESTERN DIGITAL CORP which we consider to be strong. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, WDC's net profit margin of 15.90% significantly trails the industry average.

Western Digital Corporation, through its subsidiaries, provides solutions for the collection, storage, management, protection, and use of digital content primarily audio and video worldwide. The company's principal product includes hard drives comprising 3.5-inch and 2.5-inch form factors. The company has a P/E ratio of 7.2, equal to the average computer hardware industry P/E ratioand below the S&P 500 P/E ratio of 17.7. Western Digital has a market cap of $8.05 billion and is part of the technology sector and computer hardware industry. Shares are down 3.3% year to date as of the close of trading on Thursday.

You can view the full Western Digital Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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