Western Digital Stock Set For Bounce After Weak Post-Earnings Performance?

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WDC: Western Digital logo
WDC
Western Digital

Western Digital Corp stock (NASDAQ: WDC) is down 8.2% in the past week (five trading days), performing much worse than the S&P 500, which was up 0.4% over this period. Additionally, if you look at the change over the last ten days and one month, too, the stock has returned -0.8% and 3.8%, performing worse than the broader markets on both occasions. WDC announced Q1 ’23 earnings early November, with revenue around $3.74 billion, much lower than $5.05 billion in Q1 ’22 (WDC’s fiscal year ends in June). Additionally, with COGS and operating expenses dropping at a much slower rate than revenues, operating income fell from $778 million to $158 million over this period. Finally, combined with a much higher effective tax rate, net income dropped and EPS came in lower at $0.09, much lower than $1.97 in Q1 ’22.

Now, is WDC stock set to continue its underperformance or could we expect a bounce back? We believe that there is an average 54% chance of a rise in WDC stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on WDC Stock Chance of Rise. For additional details about the company’s historical returns and comparison to peers, see Western Digital (WDC) Stock Return. 

Relevant Articles
  1. Why Has Western Digital Stock Underperformed The S&P Since 2017?
  2. Western Digital Stock Has Outperformed The S&P Since 2018 Despite A Drop In Sales
  3. After Rough Month, Can Western Digital Stock Turn Things Around?
  4. Why Has Western Digital Stock Underperformed Despite Revenue Growth?
  5. Forecast Of The Day: Western Digital’s Client Solutions Revenue
  6. Turnaround In Financials To Drive Western Digital Stock Higher

Twenty-One Day: WDC 3.8%, vs. S&P500 5.6%; Underperformed market

(38% likelihood event; 54% probability of rise over next 21 days)

  • WDC stock rose 3.8% over the last twenty-one trading days (one month), compared to a broader market (S&P500) rise of 5.6%
  • A change of 3.8% or more over twenty-one trading days is a 38% likelihood event, which has occurred 954 times out of 2516 in the last 10 years
  • Of these 954 instances, the stock has seen a positive movement over the next twenty-one trading days on 519 occasions
  • This points to a 54% probability for the stock rising over the next twenty-one trading days

Ten Day: WDC -0.8%, vs. S&P500 4.7%; Underperformed market

(41% likelihood event; 54% probability of rise over next 10 days)

  • WDC stock dropped a marginal 0.8% over the last ten trading days (two weeks), compared to a broader market (S&P500) rise of 4.7%
  • A change of -0.8% or more over ten trading days is a 41% likelihood event, which has occurred 1032 times out of 2518 in the last 10 years
  • Of these 1032 instances, the stock has seen a positive movement over the next ten trading days on 554 occasions
  • This points to a 54% probability for the stock rising over the next ten trading days

Five Day: WDC -8.2%, vs. S&P500 0.4%; Underperformed market

(8% likelihood event; 47% probability of rise over next five days)

  • WDC stock lost 8.2% over a five-day trading period ending 11/22/2022, compared to the broader market (S&P500) which was up 0.4% over this period.
  • A change of -8.2% or more over five trading days (one week) is an 8% likelihood event, which has occurred 200 times out of 2518 in the last 10 years.
  • Of these 200 instances, the stock has seen a positive movement over the next five trading days on 94 occasions.
  • This points to a 47% probability for the stock rising over the next five trading days.

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 Nov 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 WDC Return 8% -43% -46%
 S&P 500 Return 4% -16% 80%
 Trefis Multi-Strategy Portfolio 4% -19% 222%

[1] Month-to-date and year-to-date as of 11/23/2022
[2] Cumulative total returns since the end of 2016

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