Western Digital (NASDAQ:WDC) Shares Down 6.8% – Should You Sell?

Western Digital Corporation (NASDAQ:WDC)’s stock price dropped 6.8% on Wednesday. The company traded as low as $321.60 and last traded at $323.83. Approximately 7,211,482 shares changed hands during trading, a decline of 17% from the average daily volume of 8,648,736 shares. The stock had previously closed at $347.35.

More Western Digital News

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

• Positive Sentiment: Western Digital’s fiscal first-quarter results beat expectations, while its second-quarter outlook and strong pricing, higher-capacity drives and AI-related storage demand support the prospect of further margin growth. Article: Western Digital’s Q1 Beat and Q2 Outlook Signal More Margin Upside
• Positive Sentiment: The company raised its quarterly dividend by nearly 17%, a shareholder-return boost following strong revenue and earnings growth. Article: This Data Center and Storage Stock Just Raised Its Dividend by Nearly 17%
• Neutral Sentiment: Western Digital has recently moved with other memory and storage shares, including a rebound one session and a retreat the next, suggesting sector-wide sentiment is contributing to volatility. Article: Memory and Storage Stocks Retreat as Election and Memory-Price Worries Weigh
• Negative Sentiment: Concerns about a cautious outlook from flash maker Kioxia and potential memory-price weakness have pressured the broader group. For WDC, investors are also weighing its valuation and execution risks, particularly around HAMR technology, against its growth prospects. Article: Western Digital Fell on a Flash Maker’s Cautious Outlook Article: Is WDC a Buy as Earnings Surge but Valuation and Execution Risks Rise?

Analyst Ratings Changes

WDC has been the subject of several research reports. Sanford C. Bernstein lifted their target price on shares of Western Digital from $590.00 to $770.00 and gave the company an “outperform” rating in a report on Thursday, August 6th. Summit Insights downgraded Western Digital from a “buy” rating to a “hold” rating in a report on Thursday, August 6th. Weiss Ratings lowered Western Digital from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, October 13th. Susquehanna set a $405.00 target price on Western Digital in a research note on Friday, October 23rd. Finally, Wells Fargo & Company lowered their target price on Western Digital from $730.00 to $450.00 and set an “overweight” rating for the company in a report on Friday, October 16th. One investment analyst has rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating and six have given a Hold rating to the stock. According to data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average target price of $591.04.

Western Digital Trading Down 6.8%

The company has a market capitalization of $121.22 billion, a price-to-earnings ratio of 12.57, a price-to-earnings-growth ratio of 1.19 and a beta of 2.27. The stock’s fifty day simple moving average is $417.28 and its 200-day simple moving average is $418.03.

Western Digital (NASDAQ:WDC) last issued its quarterly earnings results on Thursday, October 22nd. The data storage provider reported $4.64 EPS for the quarter, beating the consensus estimate of $4.11 by $0.53. Western Digital had a net margin of 69.20% and a return on equity of 55.62%. The company had revenue of $4.38 billion during the quarter, compared to analysts’ expectations of $4.14 billion. During the same quarter last year, the company posted $1.78 EPS. The firm’s revenue was up 55.5% compared to the same quarter last year. On average, analysts anticipate that Western Digital Corporation will post 23.62 EPS for the current fiscal year.

Western Digital Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, December 17th. Investors of record on Friday, December 4th will be paid a dividend of $0.1750 per share. This represents a $0.70 annualized dividend and a yield of 0.2%. 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. Western Digital’s payout ratio is presently 2.33%.

Insiders Place Their Bets

In other Western Digital news, CEO Irving Tan sold 20,000 shares of the stock in a transaction dated Tuesday, August 11th. The stock was sold at an average price of $444.97, for a total value of $8,899,400.00. Following the sale, the chief executive officer owned 575,966 shares of the company’s stock, valued at $256,287,591.02. This trade represents a 3.36% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara Gubbi sold 1,795 shares of Western Digital stock in a transaction dated Friday, September 4th. The shares were sold at an average price of $459.87, for a total value of $825,466.65. Following the completion of the transaction, the insider owned 80,571 shares of the company’s stock, valued at $37,052,185.77. The trade was a 2.18% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold a total of 25,436 shares of company stock worth $11,340,064 in the last quarter. 0.20% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the company. Mowery & Schoenfeld Wealth Management LLC purchased a new position in shares of Western Digital in the second quarter valued at $28,000. Dunhill Financial LLC purchased a new stake in shares of Western Digital in the 2nd quarter worth about $29,000. Stonehage Fleming Financial Services Holdings Ltd purchased a new stake in shares of Western Digital in the 2nd quarter worth about $31,000. Gables Capital Management Inc. acquired a new stake in Western Digital in the 2nd quarter valued at about $32,000. Finally, Valley National Advisers Inc. grew its stake in Western Digital by 182.6% in the 3rd quarter. Valley National Advisers Inc. now owns 65 shares of the data storage provider’s stock valued at $30,000 after acquiring an additional 42 shares during the last quarter. Hedge funds and other institutional investors own 92.51% of the company’s stock.

About Western Digital

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.