Western Digital Corp

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WDC : NASDAQ : Technology
$62.09 -1.26 | -1.99%
Today's Range: 60.78 - 64.875
Avg. Daily Volume: 4989800.0
12/05/16 - 4:14 PM ET

Financial Analysis


WESTERN DIGITAL CORP's gross profit margin for the first quarter of its fiscal year 2017 has increased when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. WESTERN DIGITAL CORP has strong liquidity. Currently, the Quick Ratio is 1.62 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 15.41% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)4714.03360.0
EBITDA ($mil)898.0614.0
EBIT ($mil)390.0378.0
Net Income ($mil)-366.0283.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)4325.05428.0
Total Assets ($mil)29010.015261.0
Total Debt ($mil)13133.02536.0
Equity ($mil)10775.09336.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin39.135.21
EBITDA Margin19.0418.27
Operating Margin8.2711.25
Sales Turnover0.490.92
Return on Assets-1.48.68
Return on Equity-3.7714.19
Debt Q1 FY17 Q1 FY16
Current Ratio2.332.68
Debt/Capital0.550.21
Interest Expense236.013.0
Interest Coverage1.6529.08


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)285.47231.0
Div / share0.50.5
EPS-1.281.21
Book value / share37.7440.42
Institutional Own % n/a n/a
Avg Daily Volume4813333.05640363.0

Valuation


HOLD. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. To use another comparison, its price-to-book ratio of 1.56 indicates a discount versus the S&P 500 average of 2.79 and a significant discount versus the industry average of 4.13. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, WESTERN DIGITAL CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WDC NM Peers 14.10   WDC 9.54 Peers 9.24

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

WDC's P/E is negative making this valuation measure meaningless.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

WDC is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
WDC 7.59 Peers 12.60   WDC NA Peers 1.46

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

WDC is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WDC 1.56 Peers 4.13   WDC -122.95 Peers -16.05

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

WDC is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, WDC is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WDC 1.17 Peers 2.37   WDC 2.56 Peers -5.83

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

WDC is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

WDC has a sales growth rate that significantly exceeds its peers.

 

 

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