Intrinsic value of Western Digital - WDC

Previous Close

$42.03

  Intrinsic Value

$168.61

stock screener

  Rating & Target

str. buy

+301%

Previous close

$42.03

 
Intrinsic value

$168.61

 
Up/down potential

+301%

 
Rating

str. buy

We calculate the intrinsic value of WDC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  46.94
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.21
  6.08
  5.98
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
  5.28
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
  5.13
Revenue, $m
  19,093
  20,582
  22,130
  23,738
  25,410
  27,147
  28,953
  30,832
  32,786
  34,821
  36,940
  39,147
  41,449
  43,849
  46,353
  48,968
  51,699
  54,552
  57,534
  60,653
  63,915
  67,328
  70,901
  74,641
  78,559
  82,662
  86,961
  91,467
  96,189
  101,139
  106,330
Variable operating expenses, $m
 
  15,452
  16,510
  17,610
  18,752
  19,940
  21,174
  22,458
  23,794
  25,185
  26,633
  26,758
  28,331
  29,972
  31,684
  33,471
  35,338
  37,288
  39,326
  41,458
  43,688
  46,021
  48,463
  51,019
  53,697
  56,502
  59,440
  62,520
  65,748
  69,132
  72,679
Fixed operating expenses, $m
 
  2,824
  2,886
  2,949
  3,014
  3,081
  3,148
  3,218
  3,288
  3,361
  3,435
  3,510
  3,587
  3,666
  3,747
  3,830
  3,914
  4,000
  4,088
  4,178
  4,270
  4,364
  4,460
  4,558
  4,658
  4,761
  4,865
  4,972
  5,082
  5,193
  5,308
Total operating expenses, $m
  17,139
  18,276
  19,396
  20,559
  21,766
  23,021
  24,322
  25,676
  27,082
  28,546
  30,068
  30,268
  31,918
  33,638
  35,431
  37,301
  39,252
  41,288
  43,414
  45,636
  47,958
  50,385
  52,923
  55,577
  58,355
  61,263
  64,305
  67,492
  70,830
  74,325
  77,987
Operating income, $m
  1,954
  2,306
  2,734
  3,179
  3,644
  4,127
  4,631
  5,156
  5,704
  6,275
  6,872
  8,879
  9,530
  10,211
  10,922
  11,667
  12,447
  13,264
  14,120
  15,017
  15,957
  16,944
  17,978
  19,064
  20,204
  21,400
  22,656
  23,974
  25,359
  26,814
  28,343
EBITDA, $m
  4,082
  5,051
  5,581
  6,133
  6,708
  7,306
  7,930
  8,579
  9,256
  9,962
  10,699
  11,468
  12,271
  13,111
  13,988
  14,906
  15,867
  16,873
  17,926
  19,029
  20,185
  21,397
  22,668
  24,001
  25,400
  26,867
  28,408
  30,024
  31,722
  33,504
  35,376
Interest expense (income), $m
  777
  736
  816
  899
  985
  1,074
  1,167
  1,263
  1,363
  1,468
  1,577
  1,690
  1,808
  1,931
  2,059
  2,193
  2,332
  2,478
  2,630
  2,790
  2,956
  3,130
  3,313
  3,504
  3,703
  3,913
  4,132
  4,361
  4,602
  4,854
  5,119
Earnings before tax, $m
  769
  1,570
  1,918
  2,281
  2,659
  3,053
  3,464
  3,893
  4,340
  4,807
  5,295
  7,189
  7,722
  8,280
  8,864
  9,475
  10,115
  10,786
  11,490
  12,227
  13,001
  13,813
  14,666
  15,561
  16,500
  17,487
  18,524
  19,613
  20,757
  21,960
  23,224
Tax expense, $m
  372
  424
  518
  616
  718
  824
  935
  1,051
  1,172
  1,298
  1,430
  1,941
  2,085
  2,236
  2,393
  2,558
  2,731
  2,912
  3,102
  3,301
  3,510
  3,730
  3,960
  4,201
  4,455
  4,722
  5,001
  5,295
  5,604
  5,929
  6,270
Net income, $m
  397
  1,146
  1,400
  1,665
  1,941
  2,229
  2,529
  2,842
  3,168
  3,509
  3,866
  5,248
  5,637
  6,044
  6,471
  6,917
  7,384
  7,874
  8,387
  8,926
  9,491
  10,084
  10,706
  11,359
  12,045
  12,766
  13,522
  14,317
  15,153
  16,031
  16,953

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  6,378
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  29,860
  29,743
  31,980
  34,304
  36,720
  39,230
  41,840
  44,555
  47,379
  50,319
  53,381
  56,571
  59,897
  63,365
  66,985
  70,763
  74,709
  78,832
  83,142
  87,648
  92,362
  97,295
  102,458
  107,863
  113,524
  119,454
  125,667
  132,177
  139,001
  146,155
  153,656
Adjusted assets (=assets-cash), $m
  23,482
  29,743
  31,980
  34,304
  36,720
  39,230
  41,840
  44,555
  47,379
  50,319
  53,381
  56,571
  59,897
  63,365
  66,985
  70,763
  74,709
  78,832
  83,142
  87,648
  92,362
  97,295
  102,458
  107,863
  113,524
  119,454
  125,667
  132,177
  139,001
  146,155
  153,656
Revenue / Adjusted assets
  0.813
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
Average production assets, $m
  7,697
  11,300
  12,149
  13,032
  13,950
  14,904
  15,895
  16,927
  18,000
  19,117
  20,280
  21,492
  22,755
  24,073
  25,448
  26,883
  28,383
  29,949
  31,586
  33,298
  35,089
  36,963
  38,925
  40,978
  43,129
  45,381
  47,742
  50,215
  52,808
  55,525
  58,375
Working capital, $m
  6,712
  617
  664
  712
  762
  814
  869
  925
  984
  1,045
  1,108
  1,174
  1,243
  1,315
  1,391
  1,469
  1,551
  1,637
  1,726
  1,820
  1,917
  2,020
  2,127
  2,239
  2,357
  2,480
  2,609
  2,744
  2,886
  3,034
  3,190
Total debt, $m
  13,151
  14,572
  16,049
  17,583
  19,177
  20,834
  22,557
  24,348
  26,212
  28,153
  30,174
  32,279
  34,474
  36,763
  39,152
  41,646
  44,250
  46,971
  49,816
  52,790
  55,901
  59,157
  62,564
  66,132
  69,868
  73,781
  77,882
  82,179
  86,683
  91,404
  96,355
Total liabilities, $m
  18,442
  19,630
  21,107
  22,641
  24,235
  25,892
  27,615
  29,406
  31,270
  33,211
  35,232
  37,337
  39,532
  41,821
  44,210
  46,704
  49,308
  52,029
  54,874
  57,848
  60,959
  64,215
  67,622
  71,190
  74,926
  78,839
  82,940
  87,237
  91,741
  96,462
  101,413
Total equity, $m
  11,418
  10,113
  10,873
  11,663
  12,485
  13,338
  14,226
  15,149
  16,109
  17,109
  18,150
  19,234
  20,365
  21,544
  22,775
  24,059
  25,401
  26,803
  28,268
  29,800
  31,403
  33,080
  34,836
  36,673
  38,598
  40,614
  42,727
  44,940
  47,260
  49,693
  52,243
Total liabilities and equity, $m
  29,860
  29,743
  31,980
  34,304
  36,720
  39,230
  41,841
  44,555
  47,379
  50,320
  53,382
  56,571
  59,897
  63,365
  66,985
  70,763
  74,709
  78,832
  83,142
  87,648
  92,362
  97,295
  102,458
  107,863
  113,524
  119,453
  125,667
  132,177
  139,001
  146,155
  153,656
Debt-to-equity ratio
  1.152
  1.440
  1.480
  1.510
  1.540
  1.560
  1.590
  1.610
  1.630
  1.650
  1.660
  1.680
  1.690
  1.710
  1.720
  1.730
  1.740
  1.750
  1.760
  1.770
  1.780
  1.790
  1.800
  1.800
  1.810
  1.820
  1.820
  1.830
  1.830
  1.840
  1.840
Adjusted equity ratio
  0.215
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  397
  1,146
  1,400
  1,665
  1,941
  2,229
  2,529
  2,842
  3,168
  3,509
  3,866
  5,248
  5,637
  6,044
  6,471
  6,917
  7,384
  7,874
  8,387
  8,926
  9,491
  10,084
  10,706
  11,359
  12,045
  12,766
  13,522
  14,317
  15,153
  16,031
  16,953
Depreciation, amort., depletion, $m
  2,128
  2,745
  2,847
  2,954
  3,064
  3,179
  3,299
  3,423
  3,552
  3,687
  3,827
  2,589
  2,742
  2,900
  3,066
  3,239
  3,420
  3,608
  3,806
  4,012
  4,228
  4,453
  4,690
  4,937
  5,196
  5,468
  5,752
  6,050
  6,362
  6,690
  7,033
Funds from operations, $m
  3,528
  3,891
  4,248
  4,619
  5,005
  5,408
  5,828
  6,265
  6,721
  7,196
  7,693
  7,837
  8,379
  8,945
  9,537
  10,156
  10,804
  11,482
  12,193
  12,938
  13,719
  14,537
  15,396
  16,296
  17,241
  18,233
  19,274
  20,367
  21,515
  22,721
  23,987
Change in working capital, $m
  91
  45
  46
  48
  50
  52
  54
  56
  59
  61
  64
  66
  69
  72
  75
  78
  82
  86
  89
  94
  98
  102
  107
  112
  118
  123
  129
  135
  142
  149
  156
Cash from operations, $m
  3,437
  3,846
  4,201
  4,571
  4,955
  5,356
  5,773
  6,209
  6,662
  7,135
  7,629
  7,771
  8,310
  8,873
  9,461
  10,077
  10,722
  11,397
  12,104
  12,844
  13,621
  14,435
  15,288
  16,184
  17,124
  18,110
  19,145
  20,232
  21,374
  22,572
  23,831
Maintenance CAPEX, $m
  0
  -1,262
  -1,361
  -1,464
  -1,570
  -1,681
  -1,796
  -1,915
  -2,039
  -2,169
  -2,303
  -2,443
  -2,589
  -2,742
  -2,900
  -3,066
  -3,239
  -3,420
  -3,608
  -3,806
  -4,012
  -4,228
  -4,453
  -4,690
  -4,937
  -5,196
  -5,468
  -5,752
  -6,050
  -6,362
  -6,690
New CAPEX, $m
  -578
  -826
  -850
  -883
  -918
  -954
  -992
  -1,031
  -1,073
  -1,117
  -1,163
  -1,212
  -1,263
  -1,318
  -1,375
  -1,435
  -1,499
  -1,566
  -1,637
  -1,712
  -1,791
  -1,874
  -1,961
  -2,054
  -2,151
  -2,253
  -2,360
  -2,473
  -2,593
  -2,718
  -2,850
Cash from investing activities, $m
  -636
  -2,088
  -2,211
  -2,347
  -2,488
  -2,635
  -2,788
  -2,946
  -3,112
  -3,286
  -3,466
  -3,655
  -3,852
  -4,060
  -4,275
  -4,501
  -4,738
  -4,986
  -5,245
  -5,518
  -5,803
  -6,102
  -6,414
  -6,744
  -7,088
  -7,449
  -7,828
  -8,225
  -8,643
  -9,080
  -9,540
Free cash flow, $m
  2,801
  1,758
  1,990
  2,224
  2,467
  2,721
  2,986
  3,262
  3,550
  3,850
  4,163
  4,116
  4,457
  4,813
  5,186
  5,576
  5,984
  6,411
  6,858
  7,327
  7,818
  8,333
  8,874
  9,441
  10,036
  10,661
  11,317
  12,007
  12,731
  13,492
  14,292
Issuance/(repayment) of debt, $m
  -4,281
  1,421
  1,476
  1,534
  1,594
  1,657
  1,723
  1,792
  1,864
  1,940
  2,021
  2,106
  2,195
  2,289
  2,389
  2,494
  2,604
  2,721
  2,844
  2,974
  3,111
  3,255
  3,407
  3,568
  3,736
  3,914
  4,100
  4,297
  4,504
  4,721
  4,950
Issuance/(repurchase) of shares, $m
  296
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -4,021
  1,421
  1,476
  1,534
  1,594
  1,657
  1,723
  1,792
  1,864
  1,940
  2,021
  2,106
  2,195
  2,289
  2,389
  2,494
  2,604
  2,721
  2,844
  2,974
  3,111
  3,255
  3,407
  3,568
  3,736
  3,914
  4,100
  4,297
  4,504
  4,721
  4,950
Total cash flow (excl. dividends), $m
  -1,223
  3,180
  3,466
  3,758
  4,062
  4,378
  4,709
  5,054
  5,414
  5,790
  6,184
  6,221
  6,652
  7,103
  7,575
  8,069
  8,588
  9,132
  9,702
  10,301
  10,929
  11,589
  12,281
  13,008
  13,772
  14,575
  15,418
  16,304
  17,235
  18,213
  19,242
Retained Cash Flow (-), $m
  -273
  -729
  -760
  -790
  -821
  -854
  -887
  -923
  -960
  -1,000
  -1,041
  -1,085
  -1,131
  -1,179
  -1,231
  -1,285
  -1,342
  -1,402
  -1,465
  -1,532
  -1,603
  -1,677
  -1,755
  -1,838
  -1,925
  -2,016
  -2,112
  -2,214
  -2,320
  -2,432
  -2,550
Prev. year cash balance distribution, $m
 
  2,034
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  4,485
  2,706
  2,968
  3,240
  3,525
  3,821
  4,131
  4,454
  4,791
  5,143
  5,137
  5,521
  5,923
  6,344
  6,785
  7,246
  7,730
  8,237
  8,769
  9,326
  9,912
  10,526
  11,171
  11,848
  12,559
  13,306
  14,090
  14,915
  15,781
  16,692
Discount rate, %
 
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
 
  4,292
  2,467
  2,566
  2,645
  2,701
  2,733
  2,742
  2,725
  2,684
  2,619
  2,359
  2,268
  2,157
  2,029
  1,886
  1,733
  1,572
  1,407
  1,243
  1,082
  928
  783
  650
  530
  424
  333
  256
  193
  142
  102
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Western Digital Corporation (Western Digital) is a developer, manufacturer and provider of data storage devices and solutions that address the needs of the information technology (IT) industry and the infrastructure that enables the proliferation of data in virtually every industry. The Company's portfolio of offerings addresses three categories: Datacenter Devices and Solutions (capacity and performance enterprise hard disk drives (HDDs), enterprise solid state drives (SSDs), datacenter software and system solutions); Client Devices (mobile, desktop, gaming and digital video hard drives, client SSDs, embedded products and wafers), and Client Solutions (removable products, hard drive content solutions and flash content solutions). The Company develops and manufactures a portion of the recording heads and magnetic media used in its hard drive products.

FINANCIAL RATIOS  of  Western Digital (WDC)

Valuation Ratios
P/E Ratio 31.1
Price to Sales 0.6
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 3.6
Price to Free Cash Flow 4.3
Growth Rates
Sales Growth Rate 46.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -1%
Cap. Spend. - 3 Yr. Gr. Rate -1.6%
Financial Strength
Quick Ratio 27
Current Ratio 0.1
LT Debt to Equity 113.1%
Total Debt to Equity 115.2%
Interest Coverage 2
Management Effectiveness
Return On Assets 2.5%
Ret/ On Assets - 3 Yr. Avg. 4.7%
Return On Total Capital 1.5%
Ret/ On T. Cap. - 3 Yr. Avg. 5.1%
Return On Equity 3.5%
Return On Equity - 3 Yr. Avg. 7.4%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 31.8%
Gross Margin - 3 Yr. Avg. 29.1%
EBITDA Margin 19.2%
EBITDA Margin - 3 Yr. Avg. 16.3%
Operating Margin 10.2%
Oper. Margin - 3 Yr. Avg. 8.3%
Pre-Tax Margin 4%
Pre-Tax Margin - 3 Yr. Avg. 5.3%
Net Profit Margin 2.1%
Net Profit Margin - 3 Yr. Avg. 4.7%
Effective Tax Rate 48.4%
Eff/ Tax Rate - 3 Yr. Avg. -0.9%
Payout Ratio 144.6%

WDC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WDC stock intrinsic value calculation we used $19093 million for the last fiscal year's total revenue generated by Western Digital. The default revenue input number comes from 2017 income statement of Western Digital. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WDC stock valuation model: a) initial revenue growth rate of 7.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.5%, whose default value for WDC is calculated based on our internal credit rating of Western Digital, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Western Digital.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WDC stock the variable cost ratio is equal to 75.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2763 million in the base year in the intrinsic value calculation for WDC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.6% for Western Digital.

Corporate tax rate of 27% is the nominal tax rate for Western Digital. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WDC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WDC are equal to 54.9%.

Life of production assets of 8.3 years is the average useful life of capital assets used in Western Digital operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WDC is equal to 3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11418 million for Western Digital - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 299.242 million for Western Digital is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Western Digital at the current share price and the inputted number of shares is $12.6 billion.

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COMPANY NEWS

▶ Is Western Digital's Large Dividend Yield Sustainable?   [Dec-09-18 12:00PM  Motley Fool]
▶ Western Digital stock gains after upgrade   [10:18AM  MarketWatch]
▶ First Eagle Comments on Western Digital   [Dec-05-18 03:08PM  GuruFocus.com]
▶ GE and 10 Other Stocks to Play in December   [Dec-03-18 09:17AM  Barrons.com]
▶ Salesforce and Burlington climb while Tiffany drops   [Nov-28-18 04:35PM  Associated Press]
▶ Western Digital CFO to step down   [Nov-27-18 05:22PM  MarketWatch]
▶ Apple Taken Down To Correction Levels   [Nov-20-18 10:37AM  Zacks]
▶ Apple Stock Hounded By iPhone Production Cuts Amid Soft Demand   [Nov-19-18 04:20PM  Investor's Business Daily]
▶ Western Digital Could Jump 66%   [Nov-15-18 08:48PM  Barrons.com]
▶ Western Digital Could Jump 66%   [01:32PM  Barrons.com]
▶ You should be worried about tech stocks, and heres why   [Nov-11-18 01:21PM  MarketWatch]
▶ How Western Digital Corp.'s Shares Fell 26% Last Month   [Nov-10-18 03:21PM  Motley Fool]
▶ FPA Capital Comments on Western Digital   [Nov-05-18 03:20PM  GuruFocus.com]
▶ FPA Capital Fund 3rd Quarter Commentary   [03:00PM  GuruFocus.com]
▶ Why Western Digital Stock Is Up 14% in 2 Days   [Nov-01-18 05:45PM  Motley Fool]
▶ Nvidia Stock Is Worth a Look   [10:47AM  InvestorPlace]
▶ Jim Cramer: I Think That the Cloud Kings Remain Red Hot   [Oct-29-18 07:01PM  TheStreet.com]
▶ 3 Big Yields That Got Bigger Last Week   [03:25PM  Motley Fool]
▶ Forget Amazon and Google. Chip Stocks Are the Problem.   [Oct-26-18 06:59PM  Barrons.com]
▶ AMD, Nvidia, Western Digital Get Smoked   [04:17PM  TheStreet.com]
▶ Western Digital: Fiscal 1Q Earnings Snapshot   [04:27PM  Associated Press]
▶ Is Seagate Technology a Buy?   [Oct-13-18 03:08PM  Motley Fool]
▶ Western Digital's Decline Could Be Nearing an End   [Oct-04-18 01:45PM  TheStreet.com]
▶ Distraction-Free INTC Stock Is a Contrarians Dream   [Oct-02-18 10:26AM  InvestorPlace]
▶ Micron Slumps After Issuing Light Guidance: 7 Key Takeaways   [Sep-20-18 09:16PM  TheStreet.com]
Financial statements of WDC
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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