Western Digital's Guidance Reflects 'Sustained Cloud Strength And Expanding Profitability,' Says Bullish Analyst

Western Digital Corp WDC reported on Wednesday upbeat fiscal third-quarter earnings.

Structural changes "unlocking profitability," the new company reported a solid earnings beat, according to Rosenblatt Securities.

The Western Digital Thesis: Analyst Kevin Cassidy maintained a Buy rating, while raising the price target from $50 to $53.

The Western Digital Thesis: The company reported record high non-GAAP gross margins of 40.1%, which took its earnings to $1.36 per share, higher than consensus estimates of $1.13 per share, Cassidy said in the note.

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Western Digital's revenues of $2.29 billion in the quarter represented a sequential decline of 5%, but 31% year-on-year growth, although marginally missing consensus at $2.33 billion, he added.

The midpoint of management's fiscal fourth-quarter revenue guidance represents 6.5% sequential growth, while their gross margin projection of 40 41% reflects "sustained cloud strength and expanding profitability," the analyst stated.

"Long-term agreements with two hyperscalers provide shipment visibility and demand stability through mid-2026," he further wrote.

WDC Price Action: Shares of Western Digital had risen by 0.96% to $44.25 at the time of publication on Thursday.

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• Western Digital Analysts Increase Their Forecasts After Upbeat Earnings

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