Western Digital (WDC)
Information Technology · $159B market cap · SEC CIK 0000106040
fundamentals score out of 100
Next reports on Oct 28, 2026, with analysts expecting $4.09 in earnings per share.
The case for WDC
- Revenue up 35.7% on the year.
- Generated $3.5B of free cash flow in FY2026, 27% of revenue.
- Earns 118% on shareholder equity.
- 73% of revenue drops through to net profit.
- Holds more cash ($1.6B) than long-term debt ($0).
- Earnings per share up 363.8%.
The case against
- Priced at 12.3× sales, which leaves no room for a stumble.
- Revenue has shrunk 5.3% a year over five years.
- Swings harder than the market (beta 2.27).
- Priced at 22× book value. Very little hard asset backing here.
- Only 37% of FY2026's $9.4B profit arrived as free cash.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 50 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 36 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 75 |
| Momentumhow the price has behaved lately | 51 |
| Stabilityhow violently it moves, what it owes and what it pays you | 31 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
Key numbers
| Price / earnings | 16.9× |
|---|---|
| Price / book | 22.45× |
| Price / sales | 12.3× |
| Revenue growth (YoY) | +35.7% |
| EPS growth (YoY) | +363.8% |
| Gross margin | 49% |
| Operating margin | 30% |
| Net margin | 73% |
| Return on equity | 118% |
| Debt / equity | 0.12× |
| Current ratio | 1.33 |
| Dividend yield | 0.12% |
| Beta | 2.27 |
| 52-week range | $105.32 – $799.87 |
| Position in that range | 52% of the way up |
| 3-month return | -39.9% |
| 1-year return | +320.3% |
Five years of financials, as filed
Pulled from Western Digital's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Revenue | $12.9B | $9.5B | $6.3B | $6.3B | $18.8B |
| Gross profit | $6.3B | $3.7B | $1.8B | $1.4B | $5.9B |
| Operating income | $4.5B | $2.3B | -$403M | -$548M | $2.4B |
| Net income | $9.4B | $1.9B | -$798M | -$1.7B | $1.5B |
| Operating cash flow | $3.9B | $1.7B | -$294M | -$408M | $1.9B |
| Capital expenditure | $418M | $412M | $487M | $821M | $1.1B |
| Total assets | $13.9B | $14.0B | $24.2B | $24.5B | $26.3B |
| Total liabilities | $5.0B | $8.5B | $13.1B | $12.7B | $14.0B |
| Shareholder equity | $8.9B | $5.3B | $10.8B | $11.0B | $12.3B |
| Cash | $1.6B | $2.1B | $1.6B | $2.0B | $2.3B |
| Long-term debt | $0 | $2.5B | $5.7B | $5.9B | $7.0B |
| Free cash flow | $3.5B | $1.3B | -$781M | -$1.2B | $758M |
| Gross margin | 48.9% | 38.8% | 28.1% | 22.2% | 31.3% |
| Operating margin | 34.5% | 24.5% | -6.4% | -8.8% | 12.7% |
| Net margin | 72.9% | 19.8% | -12.6% | -26.9% | 8.2% |
| Diluted shares | 383M | 359M | 326M | 318M | 316M |
Share count is up 21.2% over 4 years. Your slice has been diluted.
What Western Digital says it does
Western Digital was founded in 1970 and is a Standard & Poor’s 500 ("S&P 500") company headquartered in San Jose, California. We are a leading developer, manufacturer, and provider of data storage devices and solutions based on hard disk drive ("HDD") technology. HDDs are critical components in the worldwide data infrastructure market, powering the AI-driven digital economy. HDDs provide reliable, cost-effective, high-capacity storage needs for a wide range of applications, ranging from cloud data centers, enterprise storage systems, edge computing, and smart video to client and consumer devices. At Western Digital, we believe that data storage provides the strategic foundation for the AI-driven data economy. We focus on designing and building data storage solutions that are intelligent, efficient, and reliable. We execute on this mission through rigorous scientific research, engineering excellence, and deep customer collaboration, so…
Risk factors WDC lists in its 10-K
- Loss of revenue from Cloud or other key customers could harm our operating results
- If we do not properly manage technology transitions and product development and introduction, our competitiveness and operating results may be negatively affected
- We are dependent on a limited number of qualified suppliers who provide critical services, materials or components, and a disruption in our supply chain could negatively affect our business
- Long-term agreements expose us to certain execution, financial, and market risks, which could be significant
- We are subject to risks related to product defects, which could result in product recalls or epidemic failures and could subject us to warranty, litigation or indemnification claims that exceed our expectations or estimates
- The loss of our key management, staff and skilled employees or the inability to hire and develop new employees could negatively impact our business prospects
- Failure to successfully execute on strategic initiatives including acquisitions, divestitures or cost saving measures may negatively impact our future results
- Our strategic relationships subject us to risks and uncertainties that could harm our business
- Adverse global or regional conditions could harm our business
- Changes in U.S. trade policy and the impact of tariffs and retaliatory actions may have a material adverse effect on our business and results of operations
- Our industry is subject to variations in demand, pricing and competitive factors, which can negatively impact our business
- Our operations, and those of certain of our suppliers and customers, are subject to substantial risk of damage or disruption
- We may be adversely affected by the risks, challenges, and evolving regulatory landscape associated with the use of AI in our operations, product development, and business practices
- Our incurrence of additional debt may negatively impact our liquidity, restrict our operations and ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions