Western Digital (NASDAQ:WDC) Shares Down 4.9% - Should You Sell?

Key Points

• Western Digital shares fell 4.9% to about $450.31 amid trading volume below its daily average, bringing the stock below its 50-day and 200-day moving averages.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and an average price target of $534.56, though individual targets range from $500 to $732.
• The company reported strong quarterly results, including $3.56 adjusted EPS versus the $3.31 estimate and 43.8% year-over-year revenue growth; however, insiders have sold more than $11.4 million of stock over the past 90 days.

Western Digital Corporation (NASDAQ:WDC - Get Free Report) shares dropped 4.9% during mid-day trading on Thursday. The stock traded as low as $449.21 and last traded at $450.31. 7,110,551 shares traded hands during trading, a decline of 17% from the average daily volume of 8,578,887 shares. The stock had previously closed at $473.69.

Analysts Set New Price Targets

A number of research analysts recently commented on the company. Barclays boosted their price target on Western Digital from $450.00 to $620.00 and gave the company an "overweight" rating in a research note on Wednesday, May 27th. UBS Group cut their price target on shares of Western Digital from $560.00 to $525.00 and set a "neutral" rating for the company in a report on Thursday, August 6th. Wall Street Zen lowered shares of Western Digital from a "strong-buy" rating to a "buy" rating in a research report on Sunday, August 16th. Susquehanna boosted their price objective on shares of Western Digital from $360.00 to $500.00 and gave the company a "neutral" rating in a research report on Wednesday, July 8th. Finally, Bank of America raised their target price on Western Digital from $610.00 to $732.00 and gave the company a "buy" rating in a report on Wednesday, July 1st. Two research analysts have rated the stock with a Strong Buy rating, seventeen have given a Buy rating and six have given a Hold rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $534.56.

Western Digital Stock Performance

The company has a fifty day moving average of $474.48 and a two-hundred day moving average of $462.70. The company has a market cap of $155.21 billion, a price-to-earnings ratio of 18.60, a P/E/G ratio of 1.97 and a beta of 2.13.

Western Digital (NASDAQ:WDC - Get Free Report) last announced its quarterly earnings results on Wednesday, August 5th. The data storage provider reported $3.56 EPS for the quarter, beating analysts' consensus estimates of $3.31 by $0.25. Western Digital had a return on equity of 48.15% and a net margin of 72.95%.The firm had revenue of $3.75 billion for the quarter, compared to analyst estimates of $3.70 billion. During the same period last year, the firm posted $1.66 earnings per share. The business's revenue for the quarter was up 43.8% on a year-over-year basis. Western Digital has set its Q1 2027 guidance at 3.850-4.150 EPS. Equities analysts expect that Western Digital Corporation will post 19.65 EPS for the current fiscal year.

Western Digital Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Thursday, September 17th. Stockholders of record on Tuesday, September 8th were issued a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.1%. The ex-dividend date was Tuesday, September 8th. Western Digital's payout ratio is 2.48%.

Insider Buying and Selling

In related news, insider Cynthia Tregillis sold 432 shares of the stock in a transaction on Friday, September 4th. The stock was sold at an average price of $451.20, for a total value of $194,918.40. Following the completion of the sale, the insider directly owned 111,030 shares in the company, valued at $50,096,736. This represents a 0.39% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Vidyadhara Gubbi sold 1,795 shares of the firm's stock in a transaction on Friday, September 4th. The stock was sold at an average price of $459.87, for a total value of $825,466.65. Following the transaction, the insider directly owned 80,571 shares of the company's stock, valued at approximately $37,052,185.77. This represents a 2.18% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 25,437 shares of company stock valued at $11,461,345 over the last 90 days. 0.18% of the stock is owned by insiders.

Hedge Funds Weigh In On Western Digital

A number of hedge funds and other institutional investors have recently made changes to their positions in WDC. QRG Capital Management Inc. increased its position in Western Digital by 32.4% during the 2nd quarter. QRG Capital Management Inc. now owns 87,122 shares of the data storage provider's stock valued at $55,647,000 after purchasing an additional 21,337 shares during the period. Envestnet Portfolio Solutions Inc. raised its holdings in Western Digital by 25.7% during the 2nd quarter. Envestnet Portfolio Solutions Inc. now owns 10,487 shares of the data storage provider's stock worth $6,698,000 after purchasing an additional 2,142 shares during the last quarter. ABS Direct Equity Fund LLC lifted its position in shares of Western Digital by 112.8% in the 2nd quarter. ABS Direct Equity Fund LLC now owns 1,277 shares of the data storage provider's stock worth $816,000 after purchasing an additional 677 shares during the period. Sequoia Financial Advisors LLC lifted its position in shares of Western Digital by 3.5% in the 2nd quarter. Sequoia Financial Advisors LLC now owns 17,263 shares of the data storage provider's stock worth $11,026,000 after purchasing an additional 579 shares during the period. Finally, MCF Advisors LLC boosted its stake in shares of Western Digital by 480.4% in the 2nd quarter. MCF Advisors LLC now owns 296 shares of the data storage provider's stock valued at $189,000 after purchasing an additional 245 shares during the last quarter. 92.51% of the stock is owned by institutional investors and hedge funds.

About Western Digital

Western Digital Corporation NASDAQ: WDC develops, manufactures and sells data storage products and solutions for data centers, cloud service providers, enterprises, businesses and consumers. Its portfolio is centered on hard disk drives (HDDs), including high-capacity enterprise drives used in cloud and data center environments, as well as products for network-attached storage, surveillance and personal computing.

The company markets products under brands including Western Digital, WD, WD_BLACK and Ultrastar.

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