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Results from 'Magnificent Seven' duo show cloud revenue boosted by strong AI demand

Weakness Seen in Western Digital (WDC) Estimates: Should You Stay Away?

Zacks

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is Western Digital Corporation WDC, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #5 (Strong Sell) further confirms weakness in WDC.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen eight estimates moving down in the past 60 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from $11.71 a share two months ago to its current level of $7.30.

Also, for the current quarter, Western Digital has seen six downward estimate revisions versus no revision in the opposite direction, dragging the consensus estimate down to $1.59 a share from $3.19 cents over the past 60 days.   

The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.4% in the past month.

Western Digital Corporation Price and Consensus

Western Digital Corporation Price and Consensus | Western Digital Corporation Quote

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So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Computer – Storage Devices industry, you may instead consider a better-ranked stock - NetApp, Inc. NTAP. The stock currently holds a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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See Zacks' 3 Best Stocks to Play This Trend >>


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NetApp, Inc. (NTAP) : Free Stock Analysis Report
 
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Zacks Investment Research