Is Western Digital (WDC) Stock Still a Buy After Surging 54% in One Month?

TLDR

• WDC closed at $732.95, down 1.78% on the day, but is up over 200% year to date
• A DCF model puts intrinsic value at $931.56 per share, implying 21.4% upside
• WDC’s P/E of 39.77x sits below its “Fair Ratio” of 59.27x, suggesting it’s undervalued on that measure too
• Upcoming earnings are expected to show EPS of $3.32, up 100% year-over-year
• Zacks rates WDC a #1 Strong Buy, with the Computer-Storage Devices industry ranked in the top 3% of all industries

Western Digital stock closed at $732.95 on Monday, down 1.78% on the day. That dip was steeper than the S&P 500’s 0.37% loss, though the broader index also slipped.

Western Digital Corporation, WDC

Despite the daily pullback, the bigger picture tells a different story. WDC is up over 200% year to date and gained 54.09% in the past month alone, easily outpacing the Computer and Technology sector’s 4.52% gain in the same period.

So the question investors are asking now is simple: after a run like this, is there anything left on the table?

What the Valuation Models Say

A Discounted Cash Flow analysis puts WDC’s intrinsic value at $931.56 per share. With the stock trading at $732.62 at the time of that calculation, the model implies the stock is still about 21.4% undervalued.

The DCF model projects Western Digital’s free cash flow growing from roughly $3.51 billion in 2026 to as high as $26.22 billion by 2035. The current trailing twelve-month FCF stands at $2.72 billion.

On a P/E basis, WDC trades at 39.77x earnings. That’s above the broader Tech industry average of 24.59x, but well below its peer group average of 63.87x.

Simply Wall St’s proprietary “Fair Ratio” for WDC sits at 59.27x — a model-implied level based on WDC’s own growth profile and fundamentals. The current P/E being below that figure is another data point suggesting room to run.

On a forward basis, Zacks puts WDC’s Forward P/E at 74.25x, a premium to the industry’s 25.63x. That premium reflects high earnings growth expectations baked into the price.

Eyes on Earnings

Western Digital’s next earnings release is drawing attention. Analysts are projecting EPS of $3.32, which would represent a 100% increase from the same quarter last year.

Revenue expectations are set at $3.7 billion, up 42.21% year over year.

For the full year, the Zacks Consensus Estimate calls for earnings of $10.05 per share and revenue of $12.88 billion. That’s earnings growth of over 103% compared to the prior year.

Zacks has assigned WDC a #1 Strong Buy rating. The consensus EPS estimate has edged up 0.37% over the past month, a signal analysts are slightly more optimistic heading into the print.

The Computer-Storage Devices industry currently holds a Zacks Industry Rank of 5, placing it in the top 3% of all industries tracked. That’s worth noting — WDC isn’t just benefiting from its own momentum, it’s in a strong industry group.

Simply Wall St gives WDC a valuation score of 4 out of 6. It has passed multiple checks across DCF and relative valuation frameworks.

Over the past year, WDC has delivered returns of 1,116.6% — one of the standout performers in the tech sector.

The stock’s 7-day return stands at 12.1%, with a 30-day gain of 51.3%.

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