Western Digital (NASDAQ:WDC) Posts Quarterly Earnings Results, Beats Estimates By $0.25 EPS

Western Digital (NASDAQ:WDC) released its quarterly earnings data on Wednesday. The data storage provider reported $3.56 EPS for the quarter, beating analysts’ consensus estimates of $3.31 by $0.25, FiscalAI reports. Western Digital had a net margin of 55.29% and a return on equity of 42.95%. The business had revenue of $3.75 billion during the quarter, compared to analysts’ expectations of $3.70 billion. Western Digital updated its Q1 2027 guidance to 3.850-4.150 EPS.

Here are the key takeaways from Western Digital’s conference call:

• Strong fiscal 2026 performance: Revenue rose 36% to $12.9 billion, while gross margin expanded to 49.1%, EPS more than doubled to $10.22, and free cash flow reached $3.5 billion.
• Demand and outlook remain robust: Fourth-quarter revenue increased 44% year over year to $3.75 billion, and management forecast fiscal Q1 2027 revenue of $4.1 billion plus or minus $100 million, with EPS of approximately $4.
• AI is driving durable storage demand: WD expects inference, agentic AI, physical AI, autonomous vehicles, and continued cloud growth to compound data-storage requirements, with more than 80% of hyperscale data-center data currently stored on HDDs.
• Technology roadmap supports capacity and margin growth: The company began ramping 40-terabyte ePMR drives, expects 44-terabyte HAMR shipments in the first half of calendar 2027, and targets more than 25% annual exabyte growth alongside roughly 10% long-term annual cost-per-terabyte declines.
• Capital returns remain a priority: WD ended the quarter with $500 million of net cash, repurchased $1 billion of stock during the quarter, and declared a $0.15-per-share dividend.

Western Digital Trading Down 5.4%

Shares of WDC traded down $29.39 during midday trading on Wednesday, reaching $519.17. The stock had a trading volume of 9,391,189 shares, compared to its average volume of 8,921,373. The firm has a 50 day simple moving average of $569.37 and a 200-day simple moving average of $413.52. Western Digital has a one year low of $73.14 and a one year high of $799.87. The firm has a market cap of $178.95 billion, a PE ratio of 31.00 and a beta of 2.14.

Insider Buying and Selling

In other news, insider Cynthia L. Tregillis sold 808 shares of the stock in a transaction dated Tuesday, July 21st. The shares were sold at an average price of $529.63, for a total value of $427,941.04. Following the transaction, the insider directly owned 114,539 shares of the company’s stock, valued at $60,663,290.57. This represents a 0.70% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara K. Gubbi sold 2,475 shares of the company’s stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $556.24, for a total transaction of $1,376,694.00. Following the completion of the transaction, the insider owned 85,154 shares in the company, valued at approximately $47,366,060.96. This trade represents a 2.82% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders sold 5,093 shares of company stock worth $2,751,337. Company insiders own 0.18% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in WDC. Northern Trust Corp boosted its position in shares of Western Digital by 11.2% in the third quarter. Northern Trust Corp now owns 3,805,463 shares of the data storage provider’s stock valued at $456,884,000 after acquiring an additional 384,103 shares during the period. Soroban Capital Partners LP raised its stake in Western Digital by 1,926.3% in the 2nd quarter. Soroban Capital Partners LP now owns 3,061,134 shares of the data storage provider’s stock worth $195,882,000 after purchasing an additional 2,910,062 shares in the last quarter. AQR Capital Management LLC raised its stake in Western Digital by 70.4% in the 4th quarter. AQR Capital Management LLC now owns 2,972,703 shares of the data storage provider’s stock worth $512,107,000 after purchasing an additional 1,228,661 shares in the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC grew its position in shares of Western Digital by 6.0% during the 4th quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 2,809,409 shares of the data storage provider’s stock worth $483,977,000 after purchasing an additional 159,167 shares in the last quarter. Finally, Price T Rowe Associates Inc. MD increased its holdings in shares of Western Digital by 1.7% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,611,856 shares of the data storage provider’s stock worth $449,945,000 after purchasing an additional 44,090 shares during the period. Institutional investors own 92.51% of the company’s stock.

Western Digital News Roundup

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

• Positive Sentiment: Western Digital reported fiscal fourth-quarter EPS of $3.56, exceeding the analyst consensus of $3.31, while revenue of $3.75 billion topped the $3.70 billion estimate. Profit increased more than elevenfold year over year, supported by continued demand for memory and data-storage technology. Western Digital Profit Surges as Revenue Grows
• Positive Sentiment: Management issued first-quarter fiscal 2027 EPS guidance of $3.85–$4.15, above the $3.63 consensus estimate, and revenue guidance of $4.0–$4.2 billion, ahead of the $3.9 billion forecast. The outlook signals continued strength in storage demand and the AI infrastructure buildout.
• Positive Sentiment: The quarter’s 55.29% net margin and 42.95% return on equity reinforce the company’s improved profitability and operating momentum.
• Neutral Sentiment: Analysts had already expected a strong quarter, with forecasts reflecting higher EPS and revenue than the prior year. As a result, the earnings beat and above-consensus guidance may have been insufficient to exceed elevated investor expectations. Western Digital Earnings Are Imminent
• Negative Sentiment: The stock fell after the report, suggesting investors were selling the news or wanted an even stronger outlook. Western Digital had reportedly gained more than 222% year to date, leaving the shares vulnerable to profit-taking and a high valuation near a 31 price-to-earnings ratio. WDC Earnings: Western Digital Stock Falls Despite Strong Financial Results

Wall Street Analysts Forecast Growth

WDC has been the topic of a number of research reports. Mizuho lifted their price target on shares of Western Digital from $550.00 to $685.00 and gave the company an “outperform” rating in a research note on Monday, June 8th. The Goldman Sachs Group restated a “neutral” rating and set a $400.00 price objective on shares of Western Digital in a report on Friday, May 1st. Melius Research set a $1,050.00 target price on shares of Western Digital and gave the stock a “buy” rating in a research note on Monday, June 29th. Wells Fargo & Company lifted their price target on Western Digital from $575.00 to $730.00 and gave the company an “overweight” rating in a research note on Friday, July 10th. Finally, Morgan Stanley upped their price objective on Western Digital from $488.00 to $650.00 and gave the stock an “overweight” rating in a research report on Monday, June 15th. Two equities research analysts have rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and four have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $520.32.

Western Digital Company Profile

Western Digital Corporation is a global data storage company that designs, manufactures and sells a broad range of storage devices and systems for personal, enterprise and cloud applications. Headquartered in San Jose, California, the company develops hard disk drives (HDDs), solid-state drives (SSDs), NAND flash components and finished storage products used in PCs, external storage, servers, network-attached storage (NAS) and embedded systems.

Its product portfolio spans consumer and commercial markets, including internal and external HDDs and SSDs, removable flash memory products and storage platforms for data center and enterprise environments.