Western Digital Corp.

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WDC : NASDAQ : Electronic Technology
$89.14 | %
Today's Range: 86.5 - 89.32
Avg. Daily Volume: 4202700.0
02/23/18 - 4:00 PM ET

Financial Analysis


WESTERN DIGITAL CORP's gross profit margin for the second quarter of its fiscal year 2018 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 1.92 which shows the ability to cover short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 5.03% 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 Q2 FY18 Q2 FY17
Net Sales ($mil)5336.04888.0
EBITDA ($mil)1562.01133.0
EBIT ($mil)1027.0619.0
Net Income ($mil)-823.0235.0


Balance Sheet Q2 FY18 Q2 FY17
Cash & Equiv. ($mil)6295.05101.0
Total Assets ($mil)29840.028975.0
Total Debt ($mil)12051.013073.0
Equity ($mil)11272.010732.0


Profitability Q2 FY18 Q2 FY17
Gross Profit Margin47.141.26
EBITDA Margin29.2723.17
Operating Margin19.2512.66
Sales Turnover0.670.55
Return on Assets1.29-1.45
Return on Equity3.42-3.94
Debt Q2 FY18 Q2 FY17
Current Ratio2.552.35
Debt/Capital0.520.55
Interest Expense195.0205.0
Interest Coverage5.273.02


Share Data Q2 FY18 Q2 FY17
Shares outstanding (mil)297.0288.0
Div / share0.50.5
EPS-2.780.8
Book value / share37.9537.26
Institutional Own % n/a n/a
Avg Daily Volume4333927.03902065.0

Valuation


HOLD. WESTERN DIGITAL CORP's P/E ratio indicates a significant premium compared to an average of 20.58 for the Computers & Peripherals industry and a significant premium compared to the S&P 500 average of 25.51. To use another comparison, its price-to-book ratio of 2.23 indicates a discount versus the S&P 500 average of 3.26 and a significant discount versus the industry average of 5.87. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
WDC 69.87 Peers 20.58   WDC 5.92 Peers 15.13

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

WDC is trading at a significant premium to its peers.

 

Discount. 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 significant discount 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 6.73 Peers 14.88   WDC 0.07 Peers 0.64

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.

 

Discount. 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.

WDC trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
WDC 2.23 Peers 5.87   WDC 177.56 Peers 14.80

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.

 

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

WDC is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
WDC 1.25 Peers 3.25   WDC 25.68 Peers 9.59

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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