Are Western Digital Corporation's (NASDAQ:WDC) Mixed Financials The Reason For Its Gloomy Performance on The Stock Market?

Simply Wall St.12-21 02:04

Western Digital (NASDAQ:WDC) has had a rough three months with its share price down 11%. It is possible that the markets have ignored the company's differing financials and decided to lean-in to the...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2493080674?lang=en_US&edition=fundamental","thumbnail":"https://images.simplywall.st/asset/company-cover/314057-main-header/1585186861517","is_english":true,"pubTime":"2024-12-21 02:04","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2493080674","market":"hk","top_or_hot":-1,"title":"Are Western Digital Corporation's (NASDAQ:WDC) Mixed Financials The Reason For Its Gloomy Performance on The Stock Market?","media":"Simply Wall St.","content":"<div>\n<p>Western Digital (NASDAQ:WDC) has had a rough three months with its share price down 11%.   It is possible that the markets have ignored the company's differing financials and decided to lean-in to the...</p>\n\n<a href=\"https://simplywall.st/stocks/us/tech/nasdaq-wdc/western-digital/news/are-western-digital-corporations-nasdaqwdc-mixed-financials-1\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Are Western Digital Corporation's (NASDAQ:WDC) Mixed Financials The Reason For Its Gloomy Performance on The Stock Market?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAre Western Digital Corporation's (NASDAQ:WDC) Mixed Financials The Reason For Its Gloomy Performance on The Stock Market?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-21 02:04 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/tech/nasdaq-wdc/western-digital/news/are-western-digital-corporations-nasdaqwdc-mixed-financials-1><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Western Digital (NASDAQ:WDC) has had a rough three months with its share price down 11%.   It is possible that the markets have ignored the company's differing financials and decided to lean-in to the...</p>\n\n<a href=\"https://simplywall.st/stocks/us/tech/nasdaq-wdc/western-digital/news/are-western-digital-corporations-nasdaqwdc-mixed-financials-1\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://simplywall.st/stocks/us/tech/nasdaq-wdc/western-digital/news/are-western-digital-corporations-nasdaqwdc-mixed-financials-1","article_id":"2493080674","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/company-cover/314057-main-header/1585186861517"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2493080674","pubTimestamp":1734717853,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Western Digital (NASDAQ:WDC) has had a rough three months with its share price down 11%. It is possible that the...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","QID":"纳指两倍做空ETF","USJW.SI":"ALPHAB 3xLongSG261006","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","BK4512":"苹果概念","SQQQ":"纳指三倍做空ETF","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","LU0081259029.USD":"UBS (LUX) EQUITY FUND - TECH OPPORTUNITY \"P\" (USD) ACC","BK4112":"金融交易所和数据","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","NVIW.SI":"NVDA 3xLongSG261006","BK4170":"电脑硬件、储存设备及电脑周边","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","TQQQ":"纳指三倍做多ETF","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","QLD":"纳指两倍做多ETF","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","PSQ":"纳指反向ETF","BK4585":"ETF&股票定投概念","TSYW.SI":"TESLA 3xLongSG261006","LU0006061336.USD":"Blackrock US Small and MidCap Opportunities A2 USD","USAW.SI":"AMZN 3xLongSG261006","LU1035773651.USD":"AB SICAV I - GLOBAL VALUE PORTFOLIO \"AD\" (USD) INC","WDC":"西部数据",".IXIC":"NASDAQ Composite","NDAQ":"纳斯达克OMX交易所","LU1069347547.HKD":"AB SICAV I - GLOBAL VALUE PORTFOLIO \"AD\" (HKD) INC"},"translate_title":"西部数据公司（纳斯达克股票代码：WDC）的混合财务状况是其股市表现低迷的原因吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"WDC":1,"NDAQ":1,".IXIC":1,"USJW.SI":0.6,"USAW.SI":0.6,"TSYW.SI":0.6,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NVIW.SI":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"Western Digital (NASDAQ:WDC) has had a rough three months with its share price down 11%.   It is possible that the markets have ignored the company's differing financials and decided to lean-in to the negative sentiment.  Stock prices are usually driven by a company’s financial performance over the long term, and therefore we decided to pay more attention to the company's financial performance.     Particularly, we will be paying attention to Western Digital's  ROE today.    ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders.  Put another way, it reveals the company's success at turning shareholder investments into profits.  Check out our latest analysis for Western Digital  How To Calculate Return On Equity?  The formula for return on equity is:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Western Digital is:3.2% = US$380m ÷ US$12b (Based on the trailing twelve months to September 2024). The 'return' is the yearly profit.  One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.03 in profit.   Why Is ROE Important For Earnings Growth?  We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings.  Based on how much of its profits the company chooses to reinvest or \"retain\", we are then able to evaluate a company's future ability to generate profits.  Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.  A Side By Side comparison of Western Digital's Earnings Growth And 3.2% ROE  As you can see, Western Digital's ROE looks pretty weak.   Not just that, even compared to the industry average of 9.2%, the company's ROE is entirely unremarkable.   For this reason, Western Digital's five year net income decline of 16% is not surprising given its lower ROE.  We reckon that there could also be other factors at play here.  For instance, the company has a very high payout ratio, or is faced with competitive pressures.     That being said, we compared Western Digital's performance with the industry and were concerned when we found that while the company has shrunk its earnings, the industry has grown its earnings at a rate of 22% in the same 5-year period.   NasdaqGS:WDC Past Earnings Growth December 20th 2024 Earnings growth is an important metric to consider when valuing a stock.   What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price.  By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await.    Has the market priced in the future outlook for WDC? You can find out in our latest intrinsic value infographic research report.   Is Western Digital Efficiently Re-investing Its Profits?   Western Digital doesn't pay any regular dividends, meaning that potentially all of its profits are being reinvested in the business, which doesn't explain why the company's earnings have shrunk if it is retaining all of its profits.  So there might be other factors at play here which could potentially be hampering growth. For example, the business has faced some headwinds.     Conclusion    On the whole, we feel that the performance shown by Western Digital can be open to many interpretations.      While the company does have a high rate of profit retention, its low rate of return is probably hampering its earnings growth.       With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future.     Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Valuation is complex, but we're here to simplify it.Discover if Western Digital might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"dataReport","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2493080674"}