After Rough Month, Can Western Digital Stock Turn Things Around?

Western Digital Corporation stock (NASDAQ: WDC) is down almost 4% in the past month (21 trading days), largely underperforming the S&P 500 which was up almost 5% over this period. If you look at the change over the last five and ten days, too, the stock has returned -4.6% and -1.1%, underperforming the broader market on both occasions. WDC’s recent stellar Q2 ’22 earnings saw revenue jump to $4.83 billion from $3.94 billion in Q2 ’21 (WDC’s fiscal year ends in June). As cost of sales and other operating expenses rose at a much slower rate, operating margins shot up from 4% to 15% over this period. Despite a rise in the outstanding share count, WDC’s EPS rose strongly from $0.20 in Q2 ’21 to $1.81 in Q2 ’22. Despite this, current geopolitical tensions have dragged down WDC stock, with concerns about whether the company’s earnings growth will sustain.

Now, is WDC stock set to continue its underperformance or could we expect a rally? We believe that there is an average 47% 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 WDC revenues and comparison to peers, see Western Digital (WDC) Revenue Comparison.

Twenty-One Day: WDC -3.7%, vs. S&P500 4.8%; Underperformed market

(33% likelihood event; 47% probability of rise over next 21 days)

• WDC stock dropped 3.7% the last twenty-one trading days (one month), compared to a broader market (S&P500) rise of 4.8%
• A change of -3.7% or more over twenty-one trading days is a 33% likelihood event, which has occurred 826 times out of 2517 in the last ten years
• Of these 826 instances, the stock has seen a positive movement over the next twenty-one trading days on 392 occasions
• This points to a 47% probability for the stock rising over the next twenty-one trading days

Ten Day: WDC -1.1%, vs. S&P500 1.9%; Underperformed market

(42% likelihood event; 52% probability of rise over next 10 days)

• WDC stock lost 1.1% over the last ten trading days (two weeks), compared to a broader market (S&P500) rise of 1.9%
• A change of -1.1% or more over ten trading days is a 42% likelihood event, which has occurred 1052 times out of 2517 in the last ten years
• Of these 1052 instances, the stock has seen a positive movement over the next ten trading days on 545 occasions
• This points to a 52% probability for the stock rising over the next ten trading days

Five Day: WDC -4.6%, vs. S&P500 -0.7%; Underperformed market

(16% likelihood event; 52% probability of rise over next five days)

• WDC stock dropped 4.6% over a five-day trading period ending 4/1/2022, compared to the broader market (S&P500) marginal drop of 0.7%
• A change of -4.6% or more over five trading days (one week) is a 16% likelihood event, which has occurred 396 times out of 2517 in the last ten years
• Of these 396 instances, the stock has seen a positive movement over the next five trading days on 204 occasions
• This points to a 52% probability for the stock rising over the next five trading days

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[1] Month-to-date and year-to-date as of 4/4/2022
[2] Cumulative total returns since the end of 2016

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