Western Digital Corporation Sees Stock Surge Post-Earnings Report
Western Digital Corporation (WDC), based in San Jose, California, is making waves in the data storage industry with a market cap of $22.5 billion. The company specializes in creating various types of storage solutions, including hard disk drives (HDDs), solid-state drives (SSDs), and flash storage designed for personal use and enterprise applications.
Strong Market Performance Outshines Competitors
Over the last 52 weeks, WDC has significantly outperformed the broader market. Shares have increased by 55%, while the S&P 500 Index ($SPX) rose by 32.6%. In the year 2024 alone, WDC saw their stock climb 27.3%, compared to the SPX’s 21.2% gain.
Focusing on the technology sector, WDC also outpaced the Technology Select Sector SPDR Fund’s (XLK) growth, which was 32.1% over the same period and 17.9% year-to-date.
Q3 Earnings Showcase Strength
On October 25, WDC stock jumped 4.7% after the company announced strong third-quarter earnings. These results showed improved gross margins and beat expectations for adjusted operating profit and earnings per share (EPS). The company’s cloud business, which generates 54% of total revenue, posted a striking 17% growth compared to the previous quarter and a remarkable 153% year-over-year increase. This surge was driven by a higher demand for nearline HDDs and enterprise SSDs among data center customers. Although guidance for the next quarter was slightly lowered, the overall business momentum pleased investors.
Impressive Analyst Predictions
Looking ahead to the fiscal year ending in June 2025, analysts predict WDC’s EPS to grow 696.4% year-over-year, reaching $6.56 per share. Notably, WDC has exceeded consensus estimates in each of the last four quarters, reflecting a strong track record in earnings surprises.
Among the 21 analysts covering WDC, the consensus rating is categorized as a “Strong Buy,” based on 16 “Strong Buy” ratings and five “Holds.”
Main Price Targets and Market Outlook
On October 25, analyst Mehdi Hosseini from Susquehanna raised his price target for Western Digital to $83 while keeping a “Neutral” rating. The analyst highlighted strong performance in the HDD sector and gains in eSSD products, alongside an expected recovery in NAND average selling prices (ASP) by mid-2025. This outlook suggests ongoing improvements in gross margins, operating margins, and earnings per share through 2025.
The average price target sits at $91.21, presenting a premium of 37.2% compared to current levels. The highest Street price target of $115 indicates a potential upside of nearly 73% from where the stock stands today.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
