Western Digital Stock Has Outperformed The S&P Since 2018 Despite A Drop In Sales

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Western Digital (NASDAQ:WDC) The stock price rose 1.65x from $37 at the end of 2018 to about $60 currently, primarily due to favorable changes in its P/S multiplier. During this period, the company actually saw a 7% decline in revenue and a 5% increase in the outstanding share count. Despite this, the company’s stock price has rallied and managed to outperform the S&P 500, which returned nearly 60% over the same period.

In our interactive dashboard, Why Western Digital Stock Moved: WDC stock is up 65% since 2018We break down the factors behind this move.

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WDC’s total revenue fell 7.1% from $20.6 billion in fiscal 2018 to $19.2 billion currently

  • WDC’s total revenue initially declined from $20.6 billion in FY ’18 to $16.6 billion in FY ’19, but demand has picked up as the pandemic and sales currently swell to $19.2 billion (WDC’s fiscal year June ends in).
  • WDC is a computer hard disk drive manufacturer and data storage company that designs, manufactures and sells data technology products, including storage devices, data center systems, and cloud storage services.
  • As of FY ’21, sales in China, Hong Kong and the rest of Asia accounted for 56% of WDC’s revenue, with sales in the United States second with 22%.
  • For additional details about WDC’s revenue and peer comparison, see western digital revenue comparison

Revenue per share declined 12% from $69.44 in fiscal 2018 to currently $61.39

  • WDC’s revenue declined from $20.6 billion in fiscal 2018 to $19.2 billion currently, while the outstanding share count increased from 297.4 million in fiscal 2018 to approximately 312.5 million currently.
  • Due to this, RPS has fallen 12% from $69.44 in fiscal ’18 to $61.39 currently.

The price-to-sales (P/S) multiple for WDC increased from 0.5x in 2018 to 1.2x by the end of 2021, but is currently marginally back to 1x, still 2x from its 2018 level is more.

  • WDC’s P/S multiple grew strongly by nearly 1.2x by the end of 2021, fueled by rising investor expectations around increased demand for its memory products, driving the company’s sales growth.
  • However, due to current geopolitical tensions and increasing economic uncertainty on the broader markets, the P/S multiplier has returned, which currently stands at around 1x.
  • For additional information about the company’s stock returns and peer comparison, see western digital stock return comparison,

With stock prices falling sharply across sectors, we are headed for a bear market for the first time since March 2020, when the COVID-19 outbreak triggered a market crash. We capture key trends in the Dow during and after major market crashes in our interactive dashboard analysis.market crash comparison,

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