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

WDC: Western Digital logo
Western Digital

Western Digital (NASDAQ: WDC) stock price rose 1.65x from $37 in 2018 end to around $60 currently, primarily due to favorable changes in its P/S multiple. During this period, the company in fact witnessed a 7% drop in revenues and a 5% rise in the outstanding share count. Despite this, the company’s stock price has rallied and managed to narrowly outperform the S&P 500, which returned around 60% over the same period.

In our interactive dashboard, Why Western Digital Stock Moved: WDC Stock Has Gained 65% Since 2018, we break down the factors behind this move.

(A) WDC’s Total Revenue has dropped 7.1% from $20.6 billion in FY 2018 to $19.2 billion currently

  • WDC’s total revenue initially dropped from $20.6 billion in FY ’18 to $16.6 billion in FY ’19, but demand has picked up since the pandemic and sales have risen strongly to $19.2 billion currently (WDC’s fiscal year ends in June).
  • WDC is a computer hard disk drive manufacturer and data storage company, which 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 make up the bulk of WDC’s revenues at 56%, with sales in the United States second at 22%.
  • For additional details about WDC’s revenues and comparison to peers, see Western Digital (WDC) Revenue Comparison
Relevant Articles
  1. After Rough Month, Can Western Digital Stock Turn Things Around?
  2. Why Has Western Digital Stock Underperformed Despite Revenue Growth?
  3. Forecast Of The Day: Western Digital’s Client Solutions Revenue
  4. Turnaround In Financials To Drive Western Digital Stock Higher
  5. Down 7% Last Week, What’s Next For Western Digital Stock?
  6. Rising 9% Last Month, What’s Next For Western Digital Stock?

(B) Revenue per share (RPS) decreased 12% from $69.44 in FY 2018 to $61.39 currently

  • WDC’s revenue dropped from $20.6 billion in FY 2018 to $19.2 billion currently, while the outstanding share count rose from 297.4 million in FY 2018 to around 312.5 million currently.
  • Due to this, RPS has dropped 12% from $69.44 in FY ’18 to $61.39 currently.

(C) Price-To-Sales (P/S) multiple for WDC rose strongly from 0.5x in 2018 to 1.2x by 2021 end but has pulled back marginally to 1x currently, still 2x higher than its 2018 level

  • WDC’s P/S multiple rose strongly to around 1.2x by late 2021, on the back of rising investor expectations surrounding increased demand for its memory products, leading to a rise in the company’s sales.
  • However, due to the current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 1x.
  • For additional details about the company stock returns and comparison to peers, see Western Digital (WDC) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns May 2022
MTD [1]
YTD [1]
Total [2]
 WDC Return 15% -7% -11%
 S&P 500 Return -2% -15% 81%
 Trefis Multi-Strategy Portfolio -3% -19% 217%

[1] Month-to-date and year-to-date as of 5/26/2022
[2] Cumulative total returns since the end of 2016


Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates