WDC - Embedded Expectations Analysis - 2021 02 26
Western Digital Corporation (WDC:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 17.9x Uniform P/E. At these levels, the market has expectations for profitability to remain near historical lows, and management may have concerns about their Data Center and Devices Solutions revenue, NAND technology leadership, and their enterprise SSD businessSpecifically, management may lack confidence in their ability to ramp up production capacity and shipments of 18-terabytes, enhance their customer engagement, and mitigate declines in their Data Center and Devices Solutions revenue. Furthermore, management may be exaggerating the strength of their NAND flash memory technology and positioning and the need for digital transformation for new forms of entertainment. They may also lack confidence in their ability to further expand their portfolio, improve their positioning in enterprise SSD, and invest more capital in BiCS5. Moreover, they may have concerns about the progress of their negotiations with OEMs and their investments in flash joint ventures. Finally, they may lack confidence in their ability to strengthen their new brands, sustain exabyte growth, and maintain guidance outperformance
Western Digital is a developer, manufacturer, and provider of data storage devices and solutions. The company's portfolio of technology and products address the following markets: Client Devices, which consist of hard disk drives (HDDs) and solid state drives (SSDs) for computing devices, flash-based embedded storage products, and flash-based memory wafers and components; Data Center Devices and Solutions, which consist of enterprise HDDs and enterprise SSDs, data center software and system solutions; and Client Solutions, which consist of HDDs and SSDs embedded into external storage products and removable flash-based products, such as cards, universal serial bus flash drives and wireless drives.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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