Western Digital (NASDAQ:WDC) Trading 10% Higher Following Earnings Beat

Western Digital Corporation (NASDAQ:WDC) traded up 10% during trading on Thursday following a stronger than expected earnings report. The company traded as high as $78.50 and last traded at $78.56. 13,512,611 shares changed hands during mid-day trading, an increase of 69% from the average session volume of 7,982,228 shares. The stock had previously closed at $71.43.

The data storage provider reported $1.66 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.48 by $0.18. Western Digital had a net margin of 14.13% and a return on equity of 22.13%. The company had revenue of $2.61 billion during the quarter, compared to the consensus estimate of $2.45 billion. During the same quarter in the prior year, the firm earned $1.44 EPS. The company’s revenue was up 30.0% compared to the same quarter last year.

Western Digital Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Thursday, September 18th. Shareholders of record on Thursday, September 4th will be given a $0.10 dividend. The ex-dividend date is Thursday, September 4th. This represents a $0.40 dividend on an annualized basis and a yield of 0.5%. Western Digital’s dividend payout ratio is presently 7.58%.

Western Digital announced that its board has initiated a share repurchase program on Tuesday, May 13th that authorizes the company to repurchase $2.00 billion in shares. This repurchase authorization authorizes the data storage provider to buy up to 11.7% of its stock through open market purchases. Stock repurchase programs are often an indication that the company’s leadership believes its shares are undervalued.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on WDC shares. Benchmark increased their target price on shares of Western Digital from $58.00 to $85.00 and gave the stock a “buy” rating in a research report on Thursday. BNP Paribas reiterated an “outperform” rating on shares of Western Digital in a research report on Friday, May 16th. The Goldman Sachs Group started coverage on shares of Western Digital in a research report on Thursday, July 10th. They issued a “neutral” rating and a $70.00 target price for the company. TD Cowen raised their price target on shares of Western Digital from $58.00 to $90.00 and gave the company a “buy” rating in a report on Thursday. Finally, Rosenblatt Securities raised their price target on shares of Western Digital from $53.00 to $90.00 and gave the company a “buy” rating in a report on Thursday. Four investment analysts have rated the stock with a hold rating and eighteen have issued a buy rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $75.00.

Insiders Place Their Bets

In related news, SVP Gene M. Zamiska sold 1,729 shares of the firm’s stock in a transaction on Thursday, June 5th. The shares were sold at an average price of $54.88, for a total value of $94,887.52. Following the transaction, the senior vice president directly owned 40,089 shares in the company, valued at approximately $2,200,084.32. This trade represents a 4.13% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, CEO Irving Tan sold 11,379 shares of the firm’s stock in a transaction on Tuesday, May 13th. The shares were sold at an average price of $48.19, for a total transaction of $548,354.01. Following the completion of the transaction, the chief executive officer owned 605,481 shares in the company, valued at $29,178,129.39. The trade was a 1.84% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 13,353 shares of company stock worth $657,454 over the last quarter. 0.30% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of WDC. BNP Paribas grew its position in Western Digital by 0.6% in the 4th quarter. BNP Paribas now owns 26,415 shares of the data storage provider’s stock worth $1,575,000 after purchasing an additional 166 shares during the last quarter. CVA Family Office LLC grew its position in Western Digital by 23.7% in the 2nd quarter. CVA Family Office LLC now owns 904 shares of the data storage provider’s stock worth $58,000 after purchasing an additional 173 shares during the last quarter. Forum Financial Management LP grew its position in Western Digital by 3.4% in the 2nd quarter. Forum Financial Management LP now owns 5,895 shares of the data storage provider’s stock worth $377,000 after purchasing an additional 193 shares during the last quarter. UMB Bank n.a. grew its position in Western Digital by 6.2% in the 2nd quarter. UMB Bank n.a. now owns 3,465 shares of the data storage provider’s stock worth $222,000 after purchasing an additional 202 shares during the last quarter. Finally, Private Wealth Management Group LLC grew its position in Western Digital by 102.5% in the 2nd quarter. Private Wealth Management Group LLC now owns 399 shares of the data storage provider’s stock worth $26,000 after purchasing an additional 202 shares during the last quarter. 92.51% of the stock is currently owned by institutional investors and hedge funds.

Western Digital Stock Up 10.2%

The company has a debt-to-equity ratio of 0.95, a quick ratio of 1.31 and a current ratio of 1.56. The company has a market capitalization of $27.45 billion, a price-to-earnings ratio of 15.28 and a beta of 1.54. The firm’s 50-day simple moving average is $61.69 and its 200-day simple moving average is $53.81.

Western Digital Company Profile

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook personal computers (PCs), gaming consoles, and set top boxes; and flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications.