Western Digital Corporation

Worth knowing

• Profit looks boosted by one-off gains. Reported profit is 2.0× operating cash profit (EBITDA), lifted by income outside the core business.Reported profit is 2.0× operating cash profit, lifted by income outside the core business.

  Western Digital's reported profit is 2.0× its operating cash profit (EBITDA), which is unusual: normally it's the other way round. Income outside the core business, such as interest on a large cash pile, gains on investments or asset sales, or tax items, has lifted net income, so its earnings-based valuation may look cheaper than the business alone justifies.Western Digital's reported profit is 2.0× its operating cash profit, which is unusual: normally it's the other way round. Income outside the core business, such as interest on a large cash pile, gains on investments or asset sales, or tax items, has lifted net income, so its earnings-based valuation may look cheaper than the business alone justifies.

• Profit isn't fully turning into cash. Free cash flow is only 37% of reported profit.

  Free cash flow is only 37% of reported profit. That usually means heavy spending on facilities and equipment, or cash tied up in inventory and unpaid bills. Worth checking whether it's a phase of investment or a lasting pattern.

• Operating margin at a 6-year high. 34% in FY Jun 2026, the best of the last 6 years.

  Western Digital kept 34% of revenue as operating profit in FY Jun 2026, its highest in the 6 years of filings we have.

• Valuation signals disagree. Cheaper than 90% of peers on earnings, but only 46% on operating cash profit (EBITDA).Cheaper than 90% of peers on earnings, but only 46% on operating cash profit.

  Relative to its earnings, Western Digital looks cheaper than 90% of peers; relative to its operating cash profit (EBITDA), cheaper than only 46%. The valuation score blends the two, so look at which measure fits this business best.Relative to its earnings, Western Digital looks cheaper than 90% of peers; relative to its operating cash profit, cheaper than only 46%. The valuation score blends the two, so look at which measure fits this business best.