Western Digital Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Western Digital's FY2026 results (fiscal year ended 3 Jul) confirm a powerful operational turnaround—revenue of $12.92B with 35.7% YoY growth, operating margin of 34.5%, and FCF of $3.51B—while total debt was slashed from $5.08B to $1.05B.
At $393.31 the stock trades at a PE of 14.48 (70% below the peer median) and has corrected roughly 45% from its peak, leaving RSI at 37.2 in oversold territory ahead of the October 22 Q1 FY2027 earnings release. The call is a cautious buy: the fundamental re-rating is real and the pullback has compressed valuation to an attractive level, but reported net income of $9.42B materially exceeds operating income of $4.45B, signaling non-operating gains that flatter headline earnings and warrant skepticism about sustainability.
What could go wrong
- Non-operating gain distortion. FY2026 net income of $9.42B exceeds operating income of $4.45B, indicating a large non-operating item inflates the headline PE of 14.48; sustainable earnings power may be lower than it appears.
- Persistent insider selling. Over 24 months insiders net sold 283,573 shares for $64.6M with zero acquisition transactions and no cluster buys, including CEO and CFO dispositions as recently as September 2026.
- Cyclicality and competitive threat. Memory/storage is inherently cyclical; news of Toshiba's potential HDD expansion and competition for TDK's magnetic-heads unit raises supply concerns, and one customer group reportedly controls 89% of revenue.
- Technical breakdown. Stock at $393.31 trades below both the 50-day MA of $460.32 and the 200-day MA of $404.80, with negative MACD histogram of -4.50, suggesting bearish momentum may persist.
What would change my mind
Where this comes from: fundamentals, year to 3 Jul · FY25 and FY26 fundamentals · peer comparison · technicals, 8 Oct. Orin's read on WDC; not advice.
How has the share price moved?
Up 201% over twelve months, from $126.67 on 27 Oct 2025 to $380.88 at the Tue 27 Oct 2026 close. Its highest close in that time was $746.23 on 18 Jun 2026; the last close is 49.0% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 36.3M, on 19 Dec 2025).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All WDC filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $21.0B | 0.3% |
| FMR | $16.6B | 0.7% |
| Vanguard Capital Management | $14.4B | 0.3% |
| JPMorgan Chase | $11.1B | 0.6% |
| Capital World Investors | $10.6B | 1.3% |
| State Street | $10.4B | 0.3% |
| Invesco | $9.2B | 0.7% |
| Vanguard Portfolio Management | $8.4B | 0.4% |
| Geode Capital Management | $5.4B | 0.3% |
| Morgan Stanley | $5.2B | 0.3% |
146 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 639 Form 4 filings; open-market trades net −$64.9M. Of the 50 on hand, 0 were open-market purchases and 8 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about WDC
Orin answers questions about WDC from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 13.3× its last 12 months of profit (Tue 27 Oct close) — higher than in 2 of the 3 of its last 5 fiscal years with a P/E (middle 11.9×); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 13.3×above usual | 11.9× | 46.1× |
| P/S | 9.84× | — | — |
| EV/EBITDA | 22.7× | — | — |
| P/B | 14.9× | — | — |
- P/S: no usual level — it ran from 0.54× to 14.4× over its last 5 fiscal years, so a middle value says little.
- EV/EBITDA: no usual level — it ran from 4.3× to 1556× over its last 5 fiscal years, so a middle value says little.
- P/B: no usual level — it ran from 0.8× to 21.0× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $617 (from $405 to $1,050) — 62% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$617
$405 – $1,050 · +62% against the last close
- 16 buy or overweight
- 3 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 13.3× its last 12 months of profit; the middle P/E of the 5 companies it is compared to that made a profit is 31.7×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| WDCWestern Digital Corporation | $143B | 13.3× | 22.7× | 52.6% | 69.2% | 114% |
| HPQHP Inc. | $30B | 12.7× | 8.8× | 19.8% | 4.1% | n/m |
| MUMicron Technology, Inc. | $1.05T | 12.3× | 9.3× | 80.7% | 63.8% | 92% |
| NTAPNetApp, Inc. | $45B | 31.7× | 21.3× | 70.6% | 19.2% | 114% |
| PEverpure, Inc | $46B | 183× | 107× | 69.7% | 5.9% | 17% |
| STXSeagate Technology Holdings plc | $152B | 33.9× | 27.1× | 50.4% | 31.9% | 245% |
- HPQ: return on equity is not meaningful (n/m) — book value is below zero.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 13.3× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now13.3×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $28 a share — 93% below the $380.86 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $28 | 93% below $380.86 |
| Levered | $10 | 97% below $380.86 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.