Western Digital (NASDAQ:WDC) Stock Falls 7.5% - Here's What Happened

Key Points

• Western Digital shares fell 7.5% to $338.59 during Monday trading, with roughly 7.17 million shares changing hands.
• Analyst sentiment remains broadly positive but mixed: the stock has a “Moderate Buy” consensus rating and an average price target of $591.04, despite recent downgrades from Summit Insights and Weiss Ratings.
• Western Digital recently exceeded quarterly earnings and revenue expectations, reporting $4.64 in EPS and $4.38 billion in revenue, while increasing its quarterly dividend to $0.175 per share.

Western Digital Corporation (NASDAQ:WDC - Get Free Report)'s share price traded down 7.5% during trading on Monday. The company traded as low as $335.75 and last traded at $338.59. Approximately 7,172,030 shares traded hands during trading, a decline of 17% from the average daily volume of 8,670,936 shares. The stock had previously closed at $366.11.

Wall Street Analyst Weigh In

A number of research firms recently issued reports on WDC. Summit Insights downgraded Western Digital from a "buy" rating to a "hold" rating in a research report on Thursday, August 6th. Sanford C. Bernstein increased their price target on Western Digital from $590.00 to $770.00 and gave the company an "outperform" rating in a research report on Thursday, August 6th. Weiss Ratings downgraded Western Digital from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Tuesday, October 13th. Robert W. Baird set a $900.00 price target on Western Digital in a research report on Friday, October 23rd. Finally, Evercore reissued an "outperform" rating on shares of Western Digital in a report on Friday, October 23rd. One research analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating and six have issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $591.04.

Western Digital Stock Down 7.5%

The stock has a market cap of $126.74 billion, a P/E ratio of 13.14, a price-to-earnings-growth ratio of 1.29 and a beta of 2.27. The firm has a 50 day simple moving average of $421.46 and a 200-day simple moving average of $416.75.

Western Digital (NASDAQ:WDC - Get Free Report) last posted its earnings results on Thursday, October 22nd. The data storage provider reported $4.64 earnings per share for the quarter, topping analysts' consensus estimates of $4.11 by $0.53. Western Digital had a return on equity of 55.62% and a net margin of 69.20%. The business had revenue of $4.38 billion for the quarter, compared to analyst estimates of $4.14 billion. During the same period in the previous year, the firm earned $1.78 EPS. The firm's revenue was up 55.5% compared to the same quarter last year. On average, equities analysts anticipate that Western Digital Corporation will post 23.62 earnings per share for the current year.

Western Digital Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, December 17th. Stockholders of record on Friday, December 4th will be given a $0.1750 dividend. 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. This represents a $0.70 annualized dividend and a dividend yield of 0.2%. Western Digital's dividend payout ratio (DPR) is currently 2.33%.

Insider Activity

In related news, CEO Irving Tan sold 20,000 shares of the business's stock in a transaction on 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 completion of the sale, the chief executive officer directly owned 575,966 shares in the company, valued at $256,287,591.02. The trade was a 3.36% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Cynthia Tregillis sold 1,007 shares of the company's stock in a transaction on Thursday, August 27th. The shares were sold at an average price of $478.36, for a total value of $481,708.52. Following the completion of the transaction, the insider directly owned 112,155 shares in the company, valued at approximately $53,650,465.80. This represents a 0.89% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 25,436 shares of company stock valued at $11,340,064. 0.20% of the stock is owned by insiders.

Hedge Funds Weigh In On Western Digital

A number of hedge funds have recently bought and sold shares of the business. TFB Advisors LLC grew its holdings in shares of Western Digital by 2.3% during the 3rd quarter. TFB Advisors LLC now owns 2,311 shares of the data storage provider's stock worth $1,050,000 after purchasing an additional 52 shares in the last quarter. 3Chopt Investment Partners LLC lifted its position in Western Digital by 24.3% during the third quarter. 3Chopt Investment Partners LLC now owns 1,529 shares of the data storage provider's stock worth $695,000 after purchasing an additional 299 shares during the period. Rakuten Investment Management Inc. grew its stake in Western Digital by 14.2% during the third quarter. Rakuten Investment Management Inc. now owns 94,958 shares of the data storage provider's stock worth $43,062,000 after buying an additional 11,834 shares in the last quarter. AIA Group Ltd acquired a new stake in Western Digital during the third quarter worth about $3,146,000. Finally, Provenance Wealth Advisors LLC bought a new position in Western Digital in the 3rd quarter valued at about $662,000. 92.51% of the stock is owned by institutional investors.

Western Digital Company Profile

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.

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