# Western Digital (WDC.US)

Canonical: https://gigainvestors.com/s/WDC

Analysis as of: 2026-10-16T07:33:03.282Z. Financial observations: FY1997–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $356.45 per share; close as of 2026-10-15.

Estimated value: low $35.88 per share, central $40.32 per share, high $46.24 per share. Buy at or below the central value $40.32 per share. Valuation as of 2026-10-16T07:33:03.282Z; scenarios are not confidence intervals.

Expected annual return: 3.7% at the stated quote. About 3.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 2 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 4

- Operating margin variation: 1.37×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.10×

- FY2018: 0.18×

- FY2019: 0.01×

- FY2020: 0.02×

- FY2021: 0.07×

- FY2022: 0.13×

- FY2023: -0.09×

- FY2024: -0.06×

- FY2025: 0.25×

- FY2026: 0.34×

### moat: fail

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 16.7%

- ROIC, second-lowest year: -2.5%

- Typical minus recent gross margin: -9.1 pp

- Typical gross margin (annual median): 29.7%

- Recent gross margin (lower of latest and 3-year median): 38.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.4%

- ROIC including acquisitions, ten-year median: 7.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 15.5%

- FY2018: 30.8%

- FY2019: 1.0%

- FY2020: 4.4%

- FY2021: 18.0%

- FY2022: 24.6%

- FY2023: -5.9%

- FY2024: -2.5%

- FY2025: 64.7%

- FY2026: >100%

### economics: pass

- Owner earnings / net income, 5-yr: 1.01×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $10B

- Net income, five-year total: $10B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 1.4 pp

- Working capital / revenue, change between three-year averages: 5.3 pp

- Working capital / revenue, final three-year average: 18.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.00×

- FY2023: 0.99×

- FY2024: 0.90×

- FY2025: 1.02×

- FY2026: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 15.5% vs 64.7%

- Per-share earnings: 1.01 to 5.18 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.8%

- Ordinary dilution, 5-year annual growth: -1.3%

- Market cap gain: $205B

- Cumulative retained earnings: $1.4B

- Diluted shares, 10-year annual growth: 1.8%

- Diluted shares, 5-year annual growth: -1.3%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 22.6%

- Per-share value change: $4.17

- Per-share value, starting three-year median: $1.01

- Per-share value, ending three-year median: $5.18

- Buybacks concentrated in cheaper years (correlation): -0.16

- Average buyback yield: 1.2%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $7.0M

- Cumulative net income, 10 years: $11B

- ROIC, first three-year median: 15.5%

- ROIC, last three-year median: 64.7%

Chart: Earnings per share; fiscal year observations.

- FY2017: $1.01

- FY2018: $1.66

- FY2019: -$1.95

- FY2020: -$0.63

- FY2021: $2.01

- FY2022: $3.70

- FY2023: -$5.30

- FY2024: -$2.45

- FY2025: $5.18

- FY2026: $24.61

### accounting: pass

- Sloan accruals exceed 10%

- Sloan accruals: 39.6%

- Receivables to sales index (DSRI): 1.00×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 5.2%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.42×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.50×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -10.2%

- FY2018: -12.1%

- FY2019: -8.7%

- FY2020: -4.2%

- FY2021: -4.1%

- FY2022: -1.3%

- FY2023: -5.2%

- FY2024: -2.1%

- FY2025: 1.2%

- FY2026: 39.6%

## Holders

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 44% since Jun 2026 · "Seagate Stock and Western Digital Tumble as Investors Worry AI Shortage Will Ease" (finance.yahoo.com, Oct 2026) · sales +35.7%

Story as of 2026-10-16T09:59:50.975Z; price observation 2026-10-15.

Price needs cash profits to grow 30.4% a year for ten years

- 2025-07-30: Western Digital beats quarterly revenue estimates on strong data storage demand ([finance.yahoo.com](https://finance.yahoo.com/news/western-digital-beats-quarterly-revenue-210248646.html))

- 2025-09-23: Western Digital (WDC): Examining Valuation as AI-Driven Demand Fuels Price Hikes and Investor Interest ([finance.yahoo.com](https://finance.yahoo.com/news/western-digital-wdc-examining-valuation-110140481.html))

- 2025-10-31: WDC Q3 Deep Dive: AI-Driven Demand Powers Nearline Storage, Margin Expansion, and Roadmap Acceleration ([finance.yahoo.com](https://finance.yahoo.com/news/wdc-q3-deep-dive-ai-124706831.html))

- 2026-01-30: Western Digital Q2 Earnings Beat, Top Line Jumps Y/Y on AI Demand Boom ([finance.yahoo.com](https://finance.yahoo.com/news/western-digital-q2-earnings-beat-131400148.html))

- 2026-04-30: Western Digital forecasts quarterly revenue above estimates on AI storage demand ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/western-digital-forecasts-quarterly-revenue-205154389.html))

- 2026-05-01: WDC Q3 Earnings Top, AI Storage Boom Fuels Explosive Y/Y Sales Growth ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/wdc-q3-earnings-top-ai-120600755.html))

### Sales · FY2025–2026

sales +35.7%; source https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm; observed 2026-08-14.

- FY2017: $19B 

- FY2018: $21B 

- FY2019: $17B 

- FY2020: $17B 

- FY2021: $17B 

- FY2022: $19B 

- FY2023: $6.3B 

- FY2024: $6.3B 

- FY2025: $9.5B 

- FY2026: $13B 

### Gross margin · FY2026

gross margin 48.9%; source https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm; observed 2026-08-14.

- FY2017: 31.8% 

- FY2018: 37.3% 

- FY2019: 22.6% 

- FY2020: 22.6% 

- FY2021: 26.7% 

- FY2022: 31.3% 

- FY2023: 22.2% 

- FY2024: 28.1% 

- FY2025: 38.8% 

- FY2026: 48.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in computer hardware; annual sales are USD 12.9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm (filed 2026-08-14); FY2026: revenue 12919000000; grossProfit 6311000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); WDC.US: Western Digital Corporation engages in the development, manufacture, and sale of data storage devices and solutions based on hard disk drive (HDD) technology in the United States, Asia, Europe, the Middle East, and Africa. The company offers internal HDDs, data center drives, data center platforms, external drives, portable drives, NAS for home and office, and accessories. It sells its data storage devices and solutions through its computer sales personnel, dealers, distributors, retailers, and subsidiaries. The company has a collaboration with Open Quantum Design for the development of quantum error correction technology and related systems to advance reliable quantum computing. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.

### Why customers stay

Margins ranged from 28.1% to 48.9% during 2024–26; it earns 16.7% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2024: grossProfit / revenue = 28.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2025: grossProfit / revenue = 38.8%.

- Source: https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm (filed 2026-08-14); FY2026: grossProfit / revenue = 48.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); 10-year return on capital observations [[2017,0.15487135715156689],[2018,0.3084153220516857],[2019,0.009877838459327394],[2020,0.044027616037265016],[2021,0.1797830656205856],[2022,0.24622778471090523],[2023,-0.058677148278666304],[2024,-0.02492718446601942],[2025,0.6474341192787795],[2026,1.0549692195378002]]; median 0.16732721138607626. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

"The increase in ASPs per exabyte was due to an improved pricing environment." (SEC filing, Aug 2026)

- Source: https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm (filed 2026-08-14); The increase in ASPs per exabyte was due to an improved pricing environment.

### Where the cash goes

Spends 0.5% of cash earnings on expansion; paid dividends in 9 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2017: growth capex 0; upkeep 557000000; owner earnings 1968000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2018: growth capex 0; upkeep 809000000; owner earnings 1922000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2019: growth capex 0; upkeep 757000000; owner earnings 301000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2020: growth capex 0; upkeep 647000000; owner earnings 669000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2021: growth capex 0; upkeep 1003000000; owner earnings 1030000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2022: growth capex 178000000; upkeep 929000000; owner earnings 1546000000. Growth capex / owner earnings = 0.11513583441138421.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); FY2025: growth capex 0; upkeep 407000000; owner earnings 1905000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm (filed 2026-08-14); FY2026: growth capex 43000000; upkeep 375000000; owner earnings 9424000000. Growth capex / owner earnings = 0.004562818336162988.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); Dividend observations: [[2017,574000000],[2018,593000000],[2019,584000000],[2020,595000000],[2021,22000000],[2022,90000000],[2023,80000000],[2024,0],[2025,44000000],[2026,184000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm (filed 2026-08-14); FY2026: cash repurchases 2592000000 USD.

### Are managers owners

Insiders own 0.3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); WDC.US SharesStats.PercentInsiders = 0.272 percentage points; cache date 2026-10-16.

### What could break it

"Loss of revenue from Cloud or other key customers could harm our operating results." (SEC filing, Aug 2026)

- Source: https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm (filed 2026-08-14); Loss of revenue from Cloud or other key customers could harm our operating results.

### What the price says

The price assumes cash profits grow 30.4% yearly over ten years; actual growth was 25.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-14); Ten-year compound average after fade. Initial solved rate 0.4338515670071138. Price 356.45; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 2.5361843543661724 → FY2026 24.60574412532637. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-11: $48.12 per share

- 2016-12: $51.36 per share

- 2017-01: $60.26 per share

- 2017-02: $58.11 per share

- 2017-03: $62.38 per share

- 2017-04: $67.32 per share

- 2017-05: $68.07 per share

- 2017-06: $66.97 per share

- 2017-07: $64.34 per share

- 2017-08: $66.72 per share

- 2017-09: $65.31 per share

- 2017-10: $67.48 per share

- 2017-11: $59.61 per share

- 2017-12: $60.11 per share

- 2018-01: $67.26 per share

- 2018-02: $65.79 per share

- 2018-03: $69.74 per share

- 2018-04: $59.55 per share

- 2018-05: $63.12 per share

- 2018-06: $58.51 per share

- 2018-07: $53.02 per share

- 2018-08: $47.80 per share

- 2018-09: $44.25 per share

- 2018-10: $32.55 per share

- 2018-11: $34.31 per share

- 2018-12: $27.94 per share

- 2019-01: $34.01 per share

- 2019-02: $38.02 per share

- 2019-03: $36.33 per share

- 2019-04: $38.64 per share

- 2019-05: $28.13 per share

- 2019-06: $35.94 per share

- 2019-07: $40.73 per share

- 2019-08: $43.29 per share

- 2019-09: $45.08 per share

- 2019-10: $39.04 per share

- 2019-11: $38.04 per share

- 2019-12: $47.97 per share

- 2020-01: $49.51 per share

- 2020-02: $42.00 per share

- 2020-03: $31.46 per share

- 2020-04: $34.83 per share

- 2020-05: $33.54 per share

- 2020-06: $33.37 per share

- 2020-07: $32.58 per share

- 2020-08: $29.04 per share

- 2020-09: $27.63 per share

- 2020-10: $28.52 per share

- 2020-11: $33.92 per share

- 2020-12: $41.87 per share

- 2021-01: $42.65 per share

- 2021-02: $51.80 per share

- 2021-03: $50.45 per share

- 2021-04: $53.39 per share

- 2021-05: $56.86 per share

- 2021-06: $53.79 per share

- 2021-07: $49.08 per share

- 2021-08: $47.77 per share

- 2021-09: $42.66 per share

- 2021-10: $39.52 per share

- 2021-11: $43.72 per share

- 2021-12: $49.29 per share

- 2022-01: $39.11 per share

- 2022-02: $38.50 per share

- 2022-03: $37.53 per share

- 2022-04: $40.11 per share

- 2022-05: $45.87 per share

- 2022-06: $33.89 per share

- 2022-07: $37.11 per share

- 2022-08: $31.94 per share

- 2022-09: $24.60 per share

- 2022-10: $25.98 per share

- 2022-11: $27.78 per share

- 2022-12: $23.85 per share

- 2023-01: $33.22 per share

- 2023-02: $29.09 per share

- 2023-03: $28.47 per share

- 2023-04: $26.03 per share

- 2023-05: $29.27 per share

- 2023-06: $28.67 per share

- 2023-07: $32.17 per share

- 2023-08: $34.01 per share

- 2023-09: $34.49 per share

- 2023-10: $30.35 per share

- 2023-11: $36.52 per share

- 2023-12: $39.58 per share

- 2024-01: $43.27 per share

- 2024-02: $44.95 per share

- 2024-03: $51.58 per share

- 2024-04: $53.54 per share

- 2024-05: $56.91 per share

- 2024-06: $57.27 per share

- 2024-07: $50.68 per share

- 2024-08: $49.58 per share

- 2024-09: $51.62 per share

- 2024-10: $49.37 per share

- 2024-11: $55.17 per share

- 2024-12: $45.07 per share

- 2025-01: $49.23 per share

- 2025-02: $48.93 per share

- 2025-03: $40.43 per share

- 2025-04: $43.86 per share

- 2025-05: $51.55 per share

- 2025-06: $63.99 per share

- 2025-07: $78.69 per share

- 2025-08: $80.34 per share

- 2025-09: $120.06 per share

- 2025-10: $150.21 per share

- 2025-11: $163.33 per share

- 2025-12: $172.27 per share

- 2026-01: $250.23 per share

- 2026-02: $279.70 per share

- 2026-03: $270.49 per share

- 2026-04: $434.52 per share

- 2026-05: $531.21 per share

- 2026-06: $638.72 per share

- 2026-07: $544.84 per share

- 2026-08: $450.55 per share

- 2026-09: $454.46 per share

- 2026-10: $380.71 per share

## Annual estimated value (USD per share)

- FY2017: low $70.18 per share, central $77.75 per share, high $87.84 per share

- FY2018: low $68.58 per share, central $76.47 per share, high $86.99 per share

- FY2019: low $51.73 per share, central $57.74 per share, high $65.75 per share

- FY2020: low $35.88 per share, central $39.87 per share, high $45.20 per share

- FY2021: low $34.95 per share, central $38.75 per share, high $43.81 per share

- FY2022: low $34.57 per share, central $38.70 per share, high $44.19 per share

- FY2023: low $14.56 per share, central $15.75 per share, high $17.32 per share

- FY2024: low $12.84 per share, central $14.00 per share, high $15.56 per share

- FY2025: low $23.99 per share, central $26.42 per share, high $29.66 per share

- FY2026: low $33.78 per share, central $37.96 per share, high $43.53 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/106040/000162828026057139/wdc-20260703.htm); period 2026-07-03, filed 2026-08-14.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.