Morningstar Rating

Stock Research and Analysis

by Peter Wahlstrom, CFA

Bulls Say

Western Digital has operationally outperformed its peers in recent years, having the lowest operating expense levels while being the industry's most successful company in the M&A field in the past decade.
The Hitachi acquisition gives WD a major presence in the mission-critical enterprise market. Successful share growth can still translate into higher gross margins.
SSD acquisitions and developments in the hybrid space should help Western Digital bridge the increasing desire for higher-performance and lower power consumption. Read more 

Bears Say

Tablets and solid-state drives have emerged as viable storage mediums in certain areas of the hard-drive markets. Cost reductions of these technologies could lead to wider adoption and shrink the overall market for hard-disk drives.
Disks drives are characterized as commodities and plagued by short product life cycles, falling prices, and large customers. This historically has led to a very competitive marketplace.
Demand for hard drives is highly cyclical and, alongside the secular shift towards SSD, difficult-to-predict periods of boom and bust characterize the industry. Read more 

Management

Overall, we view Western Digital's stewardship of shareholder capital as standard. Stephen Milligan was promoted to CEO in January 2013, after he rejoined the company through the acquisition of Hitachi, where he had served as president of the global   Read more 

Profile

Western Digital designs and manufactures hard-disk drives used in personal computers, consumer electronics, branded external hard drives, and enterprise applications. With   Read more 

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