Western Digital Corporation
Western Digital Corporation (NASDAQ: WDC) creates data storage devices and solutions. Through its salespeople, dealers, distributors, retailers, and subsidiaries, the company develops, manufactures, markets, and distributes data storage devices and solutions in the United States and internationally. Client Devices, Data Center Devices and Options, and Client Solutions are among the data storage solutions offered by the company.
Key Highlights
- The company reported revenue of USD 4.38 billion in Q1FY22 (ended April 1, 2022) vs. USD 4.14 billion in Q1FY21.
- In Q1FY22, WDC’s net income decreased to USD 25 million from USD 197 million in Q1FY21.
- As of April 1, 2022, the company had cash and cash equivalents of USD 2.51 billion and total outstanding debt of USD 7.16 million.
- WDC announced on May 9, 2022, that it is sampling its new industry-leading 22TB1 and 26TB UltraSMR HDDs to a select group of hyperscale cloud clients, extending its area density leadership and delivering customer value by lowering TCO.
- WDC’s net margin for Q1FY22 was 0.6%, significantly lower than the industry median of 5.2%.
- WDC has a strong liquidity, Current ratio of 2.09x at the end of Q1FY22 vs. Industry Median of 1.63x.
- WDC’s Q1FY22 cash cycle of 93 days is higher than the industry median of 60 days.
- Stock is currently trading above its crucial short-term (50-day) and long-term (200-day) SMA support level, a bearish indicator.
- Stock is currently leaning towards the mid-band of the 52-week range of USD 43.85 to USD 78.19.
Conclusion: Considering the company’s growth into topline, liquid balance sheet, technical indicators, and associated risks. We recommend a "Watch" rating on the stock at the closing price of USD 59.10, down 3.42%, as of May 18, 2022.
Technical Price Chart (May 18, 2022). Source: REFINITIV, Analysis by Kalkine Group
Technical Analysis Summary:
*Closing price as of May 18, 2022.
Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
Note 3: The report publishing date is as per the Pacific Time Zone.
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