Western Digital (NASDAQ:WDC) Shares Down 7.5% – Here’s What Happened

Western Digital Corporation (NASDAQ:WDC)’s share price dropped 7.5% during mid-day trading on Monday. The stock traded as low as $335.75 and last traded at $338.59. Approximately 7,172,030 shares changed hands during mid-day trading, a decline of 17% from the average daily volume of 8,670,936 shares. The stock had previously closed at $366.11.

Western Digital News Summary

Here are the key news stories impacting Western Digital this week:

• Positive Sentiment: Western Digital’s latest earnings beat expectations, and its second-quarter outlook points to further margin growth. Strong pricing, demand for higher-capacity hard drives, and cloud and AI storage needs are cited as key supports. Western Digital’s Q1 beat and Q2 outlook
• Neutral Sentiment: Some analysts view the recent pullback as a potential buying opportunity given earnings growth and cloud demand, though opinions are tempered by risks. Is the dip a buying opportunity?
• Negative Sentiment: Storage and memory shares sold off amid concerns about memory pricing and uncertainty around the U.S. election, even as the broader tech market rallied. Cautious commentary from a flash-memory maker also pressured the group, with concerns spilling over to WDC despite its hard-drive focus. Sector pressure from election and memory-price worries
• Negative Sentiment: Investors are also weighing WDC’s premium valuation and the risk of executing its HAMR hard-drive technology roadmap, which could limit confidence despite strong results. Valuation and execution risks

Analyst Ratings Changes

A number of equities analysts have recently weighed in on WDC shares. Zacks Research cut shares of Western Digital from a “strong-buy” rating to a “hold” rating in a research report on Monday, October 5th. UBS Group reaffirmed a “buy” rating and issued a $625.00 target price on shares of Western Digital in a research report on Friday, October 23rd. Wall Street Zen cut shares of Western Digital from a “strong-buy” rating to a “buy” rating in a research report on Saturday. JPMorgan Chase & Co. upped their price target on Western Digital from $600.00 to $650.00 and gave the company an “overweight” rating in a research report on Friday, October 23rd. Finally, Cantor Fitzgerald cut their price target on Western Digital from $900.00 to $625.00 and set an “overweight” rating on the stock in a report on Friday, October 23rd. One equities research analyst has rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating and six have issued a Hold rating to the stock. According to data from MarketBeat, Western Digital currently has an average rating of “Moderate Buy” and an average price target of $591.04.

Western Digital Stock Performance

The company’s 50 day moving average price is $417.28 and its 200-day moving average price is $418.03. The stock has a market cap of $121.22 billion, a P/E ratio of 27.77, a price-to-earnings-growth ratio of 1.23 and a beta of 2.27.

Western Digital (NASDAQ:WDC) last announced its quarterly earnings data on Thursday, October 22nd. The data storage provider reported $4.64 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.11 by $0.53. Western Digital had a return on equity of 55.62% and a net margin of 69.20%. The firm had revenue of $4.38 billion during the quarter, compared to the consensus estimate of $4.14 billion. During the same quarter in the prior year, the company earned $1.78 EPS. The business’s revenue for the quarter was up 55.5% on a year-over-year basis. On average, analysts forecast that Western Digital Corporation will post 23.62 earnings per share for the current fiscal year.

Western Digital Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 17th. Investors of record on Friday, December 4th will be issued a dividend of $0.1750 per share. This is a positive change from Western Digital’s previous quarterly dividend of $0.15. The ex-dividend date of this dividend is Friday, December 4th. This represents a $0.70 dividend on an annualized basis and a yield of 0.2%. Western Digital’s payout ratio is currently 2.33%.

Insider Buying and Selling at Western Digital

In other Western Digital news, insider Vidyadhara K. Gubbi sold 1,795 shares of Western Digital stock in a transaction that occurred on Friday, September 4th. The shares were sold at an average price of $459.87, for a total transaction of $825,466.65. Following the completion of the sale, the insider directly owned 80,571 shares in the company, valued at $37,052,185.77. The trade was a 2.18% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, insider Cynthia L. Tregillis sold 1,007 shares of the company’s stock in a transaction on Thursday, August 27th. The stock was sold at an average price of $478.36, for a total transaction of $481,708.52. Following the completion of the transaction, the insider owned 112,155 shares of the company’s stock, valued at $53,650,465.80. This trade represents a 0.89% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 25,436 shares of company stock valued at $11,340,064 in the last three months. Company insiders own 0.20% of the company’s stock.

Institutional Trading of Western Digital

Several hedge funds and other institutional investors have recently bought and sold shares of the company. Handelsbanken Fonder AB boosted its holdings in Western Digital by 71.4% during the 2nd quarter. Handelsbanken Fonder AB now owns 230,578 shares of the data storage provider’s stock valued at $147,275,000 after acquiring an additional 96,078 shares during the period. OMERS ADMINISTRATION Corp bought a new stake in Western Digital in the second quarter valued at approximately $19,694,000. NewEdge Wealth LLC purchased a new stake in shares of Western Digital during the second quarter valued at approximately $14,466,000. OneAscent Financial Services LLC purchased a new stake in shares of Western Digital during the second quarter valued at approximately $1,599,000. Finally, Focus Partners Advisor Solutions LLC bought a new position in shares of Western Digital in the second quarter worth approximately $8,307,000. Hedge funds and other institutional investors own 92.51% of the company’s stock.

Western Digital Company Profile

Western Digital Corporation (NASDAQ: WDC) is a data storage technology company that develops and manufactures hard disk drives (HDDs) and related storage solutions. Its products are used in data centers, cloud infrastructure, enterprise systems, personal computers, gaming platforms and external storage devices.

The company offers HDD-based products for business and consumer applications, including high-capacity drives designed for hyperscale and cloud data centers, enterprise storage environments, network-attached storage systems and personal computing.