November 23, 2023
Top 10 Stock Western Digital Hold Recommendation

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For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View Western Digital Hold

360 METRICS	November 23, 2023
VALUE
VALUE	48
GROWTH
GROWTH	93
SAFETY
SAFETY	21
SENTIMENT
SENTIMENT	27
360° VIEW
360° VIEW	42

ANALYSIS: With an Obermatt 360° View of 42 (better than 42% compared with alternatives), overall professional sentiment and financial characteristics for the stock Western Digital are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Western Digital. The consolidated Growth Rank has a good rank of 93, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 93% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 48 means that the share price of Western Digital is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 52% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 21, which means that the company has a riskier financing structure than 79% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 27, indicating professional investors are more pessimistic about the stock than for 73% of alternative investment opportunities. ...read more

RECOMMENDATION: With a consolidated 360° View of 42, Western Digital is worse than 58% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 93), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 27), the company is rather risky when it comes to financing (Safety Rank of 21). The negative market view on Western Digital may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Western Digital compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more

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Sentiment Strategy: Professional Market Sentiment for Western Digital only reserved

SENTIMENT METRICS	November 23, 2023
ANALYST OPINION
ANALYST OPINION	51
OPINIONS CHANGE
OPINIONS CHANGE	81
PRO HOLDINGS
PRO HOLDINGS	23
MARKET PULSE
MARKET PULSE	5
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	27

ANALYSIS: With an Obermatt Sentiment Rank of 27 (better than 27% compared with alternatives), overall professional sentiment and engagement for the stock Western Digital is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Western Digital. Analyst Opinions are at a rank of 51 (better than 51% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 81 which means that currently, stock research experts are getting even more optimistic about investments in Western Digital. But Market Pulse has a low rank of 5, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 95% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 23, which means that, currently, professional investors hold less stock in this company than in 77% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 27 (less encouraging than 73% compared with investment alternatives), Western Digital has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more

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Value Strategy: Western Digital Stock Price Value below-average critical

VALUE METRICS	November 23, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	71
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	3
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	71
DIVIDEND YIELD
DIVIDEND YIELD	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	48

ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Western Digital shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Western Digital. Price-to-Sales (P/S) is 71, which means that the stock price compared with what market professionals expect for future sales is lower than for 71% of comparable companies, indicating a good value concerning Western Digital's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 71% of alternatives (29% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 3, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Western Digital's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Western Digital may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more

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Growth Strategy: Western Digital Growth Momentum high

GROWTH METRICS	November 23, 2023
REVENUE GROWTH
REVENUE GROWTH	100
PROFIT GROWTH
PROFIT GROWTH	46
CAPITAL GROWTH
CAPITAL GROWTH	100
STOCK RETURNS
STOCK RETURNS	69
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	93

ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2023, Western Digital shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Western Digital. Sales Growth has a rank of 100 which means that currently, professionals expect the company to grow more than 100% of its competitors. Capital Growth is also above 46% of competitors with a rank of 100, and Stock Returns with the rank of 69 is also an outperformance. Only Profit Growth is low with a rank of 46 which means that currently, professionals expect the company to grow its profits less than 54% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Western Digital is a good growth stock. ...read more

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Safety Strategy: Western Digital Debt Financing Safety risky

SAFETY METRICS	November 23, 2023
LEVERAGE
LEVERAGE	49
REFINANCING
REFINANCING	44
LIQUIDITY
LIQUIDITY	7
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	21

ANALYSIS: With an Obermatt Safety Rank of 21 (better than 21% compared with alternatives), the company Western Digital has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Western Digital is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Western Digital. Liquidity is at 7, meaning that the company generates less profit to service its debt than 93% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 49, meaning the company has an above-average debt-to-equity ratio. It has more debt than 51% of its competitors. Finally, Refinancing is at a rank of 44 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 21 (worse than 79% compared with alternatives), Western Digital has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.

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Combined financial peformance: Western Digital Above-Average Financial Performance

COMBINED PERFORMANCE	November 23, 2023
VALUE
VALUE	48
GROWTH
GROWTH	93
SAFETY
SAFETY	7
COMBINED
COMBINED	50

ANALYSIS: With an Obermatt Combined Rank of 50 (better than 50% compared with investment alternatives), Western Digital (Technology Hardware & Peripherals, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Western Digital are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives), and are riskily financed (Safety Rank of 21, which means above-average debt burdens) but show above-average growth (Growth Rank of 93). ...read more

RECOMMENDATION: A Combined Rank of 50, is a buy recommendation based on Western Digital's financial characteristics. As the company Western Digital shows low value with an Obermatt Value Rank of 48 (52% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 93% of comparable companies (Obermatt Growth Rank is 93). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 21 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Western Digital, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more

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