- Western Digital reports improved third quarter performance with adjusted EPS of 63c compared to last year’s loss per share of $1.37. This beats the estimations of 17c, showing a solid recovery.
- Net revenue for the company has seen a 23% y/y growth, reaching $3.46 billion. This is higher than the predicted value of $3.36 billion.
- The adjusted gross margin stands at 29.3% this quarter, marking a significant leap from last year’s 10.6% and well above the estimated 23.7%.
- Operating expenses show a reduction of 4% y/y, currently sitting at $728 million. However, this is slightly above the estimate of $718.2 million.
- Inventory has decreased by 19% y/y to $3.22 billion, which is higher than the estimated inventory figure of $3.15 billion.
- The company’s free cash flow is now at $91 million, a major turnaround from last year’s negative $527 million. This revival exceeds the projections of negative $62.7 million.
- Looking ahead, Western Digital expects the fiscal fourth quarter 2024 revenue to range between $3.60 billion and $3.80 billion.
- Current analyst recommendations include 20 buys, 6 holds and 1 sell.
Western Digital on Smartkarma
Analyst coverage of Western Digital on Smartkarma by Baptista Research highlights the company’s improving profitability through cost reduction and optimized product mix. In the latest earnings report, Western Digital exceeded revenue and earnings expectations, showcasing confidence in its portfolio strategy and significant outperformance in both Flash and HDD businesses. The company reported revenue of $3 billion, a non-GAAP gross margin of 15.5%, and a non-GAAP loss per share of $0.69, meeting or exceeding the guidance range provided in October.
Baptista Research‘s analysis delves into Western Digital‘s navigation of market fluctuations and future strategies. The expanding opportunities in the cloud sector, driven by infrastructure expansion and high-speed networks, position Western Digital favorably. Expectations for higher nearline shipments in HDD, seasonal demand in the consumer market, and ongoing price optimization efforts are projected to drive sequential revenue and gross margin improvements throughout fiscal year 2024, as highlighted by the research reports.
A look at Western Digital Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 1 | |
| Growth | 2 | |
| Resilience | 2 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 2.6 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Western Digital Corporation, a global leader in digital content solutions, has garnered mixed Smart Scores across different key factors. While boasting a strong momentum score of 5, indicating robust market performance, the company lags in dividend payouts with a score of 1. Additionally, the value score stands at 3, reflecting a moderate valuation outlook. Growth and resilience factors stand at 2 each, suggesting room for improvement in these areas.
Looking ahead, Western Digital‘s long-term outlook appears promising due to its solid momentum score, indicating its current strong market position. However, there may be challenges to address in terms of growth, resilience, and dividend performance. With a diverse product portfolio encompassing hard drives, solid-state drives, and home entertainment products, the company holds the potential for future expansion and innovation in the ever-evolving digital content industry.
Disclaimer: This article by Smartkarma is general in nature and 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. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
Have feedback on this article? Concerned about the content? Get in touch with us directly.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
