Western Digital Corporation (WDC) Fair Value & PE Analysis
Computer Hardware · NASDAQ
Current Price
$462.04
PE Ratio (TTM)
24.7x
Intrinsic Value
$849.14
+45.6% margin of safety
What Is Western Digital Corporation's Fair Value?
As of 2026-07-29, applying a 25.0x earnings multiple to Western Digital Corporation's (WDC) earnings per share of $18.8 yields a fair value estimate of $849.14 per share, versus a market price of $462.04.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $704.14 to $1,013.01. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How the PE model works · Recalculate in PE mode · WDC intrinsic value (DCF view)
Is Western Digital Corporation (WDC) Overvalued?
At $462.04, WDC trades below its PE-based fair value estimate by a wide margin. By this model the stock looks cheap relative to its earnings power, but check whether earnings are sustainable before reading too much into it.
COMPETITIVE MOAT
↑Brand Recognition and Customer Loyalty
Western Digital benefits from strong brand recognition in the storage market. This fosters customer loyalty, particularly among enterprise clients and PC manufacturers who rely on established, trusted brands for critical data storage solutions.
↑Economies of Scale in Manufacturing
The company operates large-scale manufacturing facilities for both HDD and NAND flash. This scale allows for cost efficiencies and a competitive pricing advantage in a highly commoditized market.
↑Product Portfolio Breadth
WDC offers a comprehensive range of storage solutions, from high-capacity HDDs to high-performance SSDs. This broad portfolio caters to diverse customer needs across consumer, enterprise, and data center segments.
INVESTMENT RISKS
↓Supply Chain Vulnerabilities and Geopolitical Factors
The company's reliance on global supply chains for components and manufacturing makes it susceptible to disruptions from geopolitical events, trade disputes, and natural disasters.
↓Cyclicality of the Hard Drive Market
The demand for traditional hard drives is subject to significant cyclicality, influenced by PC sales, enterprise spending, and the adoption of alternative storage technologies.
↓Intensifying Competition and Market Consolidation
The storage industry is highly competitive, with major players constantly vying for market share. Potential consolidation among competitors could further intensify pricing pressures and reduce WDC's market leverage.
Base case
WDC base case PE valuation
Intrinsic Value
$849.14
Margin of safety
+45.6%
Expected annual return
+12.9%
Base case assumptions: 20.0% annual earnings growth, 25x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the WDC PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Western Digital Corporation respond.
Open PE Calculator for WDCCompany Overview
Western Digital Corporation designs, manufactures, and markets a broad range of data storage devices and software solutions across the United States, China, Hong Kong, Europe, the Middle East, Africa, and the rest of Asia, serving an international market. The company's product lineup includes client devices such as hard disk drives (HDDs) and solid-state drives (SSDs) for computing platforms like desktops, notebooks, smart video systems, gaming consoles, and set-top boxes. They also provide flash-based embedded storage solutions for mobile phones, tablets, laptops, and various portable and wearable technologies, extending into automotive, Internet of Things (IoT), industrial, and connected home applications. Additionally, Western Digital produces flash-based memory wafers. For data centers, their offerings comprise enterprise helium hard drives and sophisticated flash-based SSDs, often bundled with software tailored for enterprise servers, online transaction processing, data analysis, and other business applications. This segment also includes comprehensive data storage systems, tiered storage models, and various data storage platforms. Consumer-oriented client solutions consist of external HDDs in both mobile and desktop configurations, portable SSDs, and removable memory cards compatible with mobile phones, tablets, imaging systems, cameras, and smart video systems. Furthermore, they offer universal serial bus (USB) flash drives for computing and general consumer markets, alongside wireless drive products designed for on-the-go content backup and high-definition streaming of media and documents to tablets, smartphones, and PCs. Western Digital sells its diverse portfolio through original equipment manufacturers (OEMs), distributors, dealers, resellers, and retailers, utilizing its prominent G-Technology, SanDisk, and WD brands. Founded in 1970, the corporation is headquartered in San Jose, California.
Financial Metrics — WDC PE Stock Valuation Data
PE Ratio (TTM)
24.7x
PEG Ratio
0.08
Earnings Yield
4.07%
ROE (TTM)
91.9%
Revenue/Share (TTM)
$34.14
Dividend Yield
0.11%
Debt/Equity
0.18x
Frequently Asked Questions
What is the PE ratio of WDC?
The trailing twelve-month PE ratio of WDC reflects how much investors pay per dollar of Western Digital Corporation's earnings. This metric is most useful when compared to Computer Hardware peers and the company's own historical range.
Is WDC overvalued based on PE ratio?
WDC's PE of 24.7x combined with a PEG ratio of 0.08 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Computer Hardware, a DCF analysis may be more appropriate.
How do I value WDC stock using PE ratio?
To value Western Digital Corporation using PE: (1) Compare the current PE (24.7x) against the Computer Hardware median to assess relative pricing, (2) check the PEG ratio (0.08) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of WDC?
WDC's PEG ratio is 0.08, calculated by dividing the PE ratio (24.7x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for WDC stock valuation?
PE ratio gives a quick relative read — how WDC is priced versus Computer Hardware peers. DCF provides an absolute value based on projected free cash flows. For WDC, with a strong ROE of 91.9%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See WDC DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value WDC with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.