WDC - Embedded Expectations Analysis - 2021 06 07
Western Digital Corporation (WDC:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 10.9x Uniform P/E. Even at these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about SSD growth, their NAND business, and new product launchesSpecifically, management may lack confidence in their ability to sustain NVMe enterprise SSD growth, deliver further value for stakeholders, and continue paying down their debt obligations. Furthermore, they may have concerns about Client Device seasonality, the progress of pricing negotiations, and continued shortages in controllers. Additionally, they may be overstating the differentiators in their Flash business, the capabilities of their BiCS6 architecture, and the potential of their NAND technology investments. Moreover, management may be concerned about the sustainability of demand in NAND as well as their long road map on aerial density improvement. Finally, they may be exaggerating the current strength of their end-markets, and they may lack confidence in their ability to control their capex spend
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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