Western Digital (WDC) closed at $576.93 in the latest trading session, marking a -2.89% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.41%. On the other hand, the Dow registered a gain of 1.73%, and the technology-centric Nasdaq decreased by 0.09%.
The maker of hard drives for businesses and personal computers's stock has climbed by 22.97% in the past month, exceeding the Computer and Technology sector's gain of 10.03% and the S&P 500's gain of 4.59%.
The investment community will be closely monitoring the performance of Western Digital in its forthcoming earnings report. The company is predicted to post an EPS of $3.28, indicating a 97.59% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.69 billion, up 41.47% from the year-ago period.
WDC's full-year Zacks Consensus Estimates are calling for earnings of $10.02 per share and revenue of $12.87 billion. These results would represent year-over-year changes of +103.25% and -3.1%, respectively.
It is also important to note the recent changes to analyst estimates for Western Digital. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Western Digital is currently a Zacks Rank #1 (Strong Buy).
In terms of valuation, Western Digital is presently being traded at a Forward P/E ratio of 59.3. For comparison, its industry has an average Forward P/E of 24.53, which means Western Digital is trading at a premium to the group.
The Computer- Storage Devices industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 21, positioning it in the top 9% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).