Western Digital (NASDAQ:WDC) Stock Falls 17.4% – Time to Sell?

Shares of Western Digital Corporation (NASDAQ:WDC) dropped 17.4% on Thursday. The company traded as low as $265.00 and last traded at $267.63. Approximately 17,865,552 shares changed hands during mid-day trading, an increase of 106% from the average session volume of 8,685,013 shares. The stock had previously closed at $323.83.

Western Digital News Summary

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

• Positive Sentiment: Margins and an upgrade support the bullish case. Stronger pricing, demand for higher-capacity hard drives and operational efficiencies are helping expand gross margins, with further improvement anticipated. Zacks Research also upgraded WDC from “hold” to “strong buy.” Western Digital’s Gross Margin Momentum: How Long Can It Last? Zacks Research upgrade
• Neutral Sentiment: A valuation estimate was lowered, though it remains well above the trading price cited in the report. One model’s fair-value estimate fell from $650.67 to $613.38, reflecting tension between strong HDD fundamentals and questions about valuation, future supply and capital spending. Western Digital Stock Sees Fair Value Cut
• Negative Sentiment: AI-policy worries are weighing on the sector. A lawmaker’s call for a pause on AI development has added to investor concerns about data-center investment, pressuring memory and storage shares including WDC. The report describes a market reaction, not an enacted policy change. AI pause call extends memory rout
• Negative Sentiment: Broader memory-and-storage selling is amplifying the pressure. WDC has declined alongside peers as investors weigh election-related uncertainty and concerns about memory pricing, despite the sector’s recent strong results. Election and memory price worries weigh

Wall Street Analyst Weigh In

WDC has been the topic of several analyst reports. BNP Paribas Exane boosted their price objective on Western Digital from $660.00 to $700.00 and gave the stock an “outperform” rating in a research note on Thursday, August 6th. Wall Street Zen cut Western Digital from a “strong-buy” rating to a “buy” rating in a report on Saturday, October 31st. Summit Insights downgraded Western Digital from a “buy” rating to a “hold” rating in a research report on Thursday, August 6th. TD Cowen reduced their target price on shares of Western Digital from $540.00 to $430.00 and set a “buy” rating on the stock in a research note on Friday, October 23rd. Finally, Citigroup cut their price target on shares of Western Digital from $740.00 to $660.00 and set a “buy” rating on the stock in a report on Friday, October 23rd. Two investment analysts have rated the stock with a Strong Buy rating, twenty-one have given a Buy rating and five have given a Hold rating to the company. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $591.04.

Western Digital Stock Down 17.4%

The stock has a market cap of $100.18 billion, a P/E ratio of 10.39, a P/E/G ratio of 1.23 and a beta of 2.27. The company’s 50 day moving average price is $414.74 and its two-hundred day moving average price is $418.54.

Western Digital (NASDAQ:WDC) last issued its earnings results on Thursday, October 22nd. The data storage provider reported $4.64 earnings per share 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 business had revenue of $4.38 billion during the quarter, compared to analyst estimates of $4.14 billion. During the same period in the previous year, the company posted $1.78 EPS. Western Digital’s revenue was up 55.5% on a year-over-year basis. As a group, equities research analysts forecast that Western Digital Corporation will post 23.62 earnings per share for the current year.

Western Digital Increases Dividend

The firm 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. The ex-dividend date of this dividend is Friday, December 4th. This is a positive change from Western Digital’s previous quarterly dividend of $0.15. This represents a $0.70 annualized dividend and a yield of 0.3%. Western Digital’s dividend payout ratio is 2.33%.

Insider Buying and Selling

In other Western Digital news, insider Vidyadhara K. Gubbi sold 1,795 shares of the stock in a transaction on Friday, September 4th. The stock was sold at an average price of $459.87, for a total transaction of $825,466.65. Following the sale, the insider owned 80,571 shares of the company’s stock, valued at approximately $37,052,185.77. This trade represents a 2.18% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CEO Irving Tan sold 20,000 shares of Western Digital stock in a transaction on Tuesday, August 11th. The shares were sold at an average price of $444.97, for a total value of $8,899,400.00. Following the completion of the transaction, the chief executive officer owned 575,966 shares in the company, valued at $256,287,591.02. This represents a 3.36% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 25,436 shares of company stock valued at $11,340,064 over the last 90 days. Corporate insiders own 0.20% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in the business. Legal & General Group Plc purchased a new position in Western Digital during the 2nd quarter worth approximately $1,602,927,000. Anther Capital Ltd acquired a new stake in Western Digital in the second quarter valued at approximately $901,601,000. Deutsche Bank AG purchased a new stake in Western Digital in the 2nd quarter worth $885,565,000. Value Aligned Research Advisors LLC purchased a new stake in shares of Western Digital during the first quarter worth about $350,403,000. Finally, Trivest Advisors Ltd acquired a new position in shares of Western Digital during the second quarter valued at approximately $627,606,000. 92.51% of the stock is owned by institutional investors and hedge funds.

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.