Western Digital Corporation WDC
WDC's FY2026 results show a genuine operating turnaround—revenue doubled to $12.92B from $6.32B in FY2024, FCF swung to $3.51B from negative, and total debt was cut to $1.05B—but reported net income of $9.42B far exceeds operating income of $4.45B, meaning a large non-operating gain (likely tied to the SanDisk separation) flatters the headline 18.73x PE. On an operating-income basis the stock trades closer to ~44x, which is demanding for a cyclical storage business.
Smart money is rotating in (score rising from 0.04 to 0.32 over six months), but insiders remain persistent net sellers ($90.9M over 24 months with no cluster buys), and price sits below the 50-day MA at $508.80 versus $552.41. The risk/reward is balanced until FY2027 guidance confirms AI-driven HDD/flash pricing is sustainable rather than peak-cycle.
What could go wrong
- Peak-cycle pricing. HDD and flash pricing power may be at a cyclical peak; FY2026 revenue of $12.92B is nearly double FY2024's $6.32B, and reversion could compress margins from the current 48.8% gross level.
- Non-operating gain distortion. Net income of $9.42B exceeds operating income of $4.45B by ~$5B, suggesting a one-time gain that inflates headline EPS of $24.28 and makes the 18.73x PE misleadingly cheap.
- Persistent insider selling. Insiders net sold $90.9M over 24 months across 528 transactions with 366 dispositions; the CEO sold shares as recently as August 11, 2026, at ~$442-446.
- Technical weakness vs trend. Price of $508.80 is below the 50-day MA of $552.41 despite being well above the 200-day MA of $349.72, suggesting near-term momentum has cooled from the rally.
What would change my mind
Where this comes from: FMP fundamentals FY2026 and FY2024 · FMP fundamentals FY2026 · FMP fundamentals FY2026 and FY2024 · FMP fundamentals FY2026 and FY2024. Orin's read on WDC; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All WDC filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Fmr | $16.6B | 0.7% of fund |
| Vanguard Capital Management | $14.4B | 0.3% of fund |
| Jpmorgan Chase & | $11.1B | 0.6% of fund |
| Capital World Investors | $10.6B | 1.3% of fund |
| State Street | $10.4B | 0.3% of fund |
| Invesco | $9.2B | 0.7% of fund |
144 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 635 Form 4 filings, net −$111.2M. Of the 50 on hand, 0 were open-market purchases and 6 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about WDC
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 17.4× | — | 53.3× |
| EV/EBITDA | 18.7× | 12.9× | — |
| P/S | 12.64× | 1.46× | — |
| P/B | 18.4× | 1.5× | — |
Its P/E sits 80th percentile of its own last 5 years (+1.04σ from its own mean).
19.2%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $3.5B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$648
$400 – $1050 · +37% against today's price
- 44 buy or overweight
- 16 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| WDCWestern Digital Corporation | $163B | 17.4× | 18.7× | 48.9% | 72.9% | 119% |
| DDOGDatadog, Inc. | $90B | — | 343.2× | 79.5% | 4.5% | 5% |
| EAElectronic Arts Inc. | $53B | 48.4× | 29.8× | 79.9% | 13.8% | 17% |
| GRMNGarmin Ltd. | $55B | 29.5× | 22.1× | 60.1% | 24.5% | 21% |
| MPWRMonolithic Power Systems, Inc. | $67B | 82.7× | 64.8× | 55.2% | 24.4% | 22% |
| MSIMotorola Solutions, Inc. | $76B | 35.9× | 22.4× | 50.0% | 17.4% | 86% |
| NXPINXP Semiconductors N.V. | $59B | 20.0× | 13.7× | 55.9% | 22.6% | 28% |
| SMCISuper Micro Computer, Inc. | $27B | 11.4× | 8.5× | 10.8% | 5.7% | 25% |
| STXSeagate Technology Holdings plc | $207B | 63.5× | 49.2× | 45.6% | 26.1% | 348% |
| XYZBlock, Inc. | $44B | 131.0× | 37.4× | 46.4% | 1.4% | 2% |
The median is of the 8 peers listed above and nothing else — check it against the column. This company trades 58.6% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $-1 | $487.11 · −100% | 2026-06-10 |
| Levered DCF | $-12 | $487.11 · −102% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.