Western Digital Corp. (NASDAQ:WDC)

The analysis of the provided financial ratios over multiple quarters reveals various trends and fluctuations in valuation metrics commonly used to assess company performance.

Price to Earnings (P/E) Ratio

The P/E ratio data is sparse in the earlier periods but shows notable values beginning in September 2017. Initially, the ratio fluctuates moderately around the high teens to twenties but spikes drastically in later periods, reaching a peak above 113 in early 2021. Subsequently, the ratio trends downward but remains volatile, settling in the range of approximately 8 to 12 by late 2022 and early 2023. This pattern may suggest periods of elevated market optimism followed by a correction or reevaluation of earnings expectations.

Price to Operating Profit (P/OP) Ratio

Reported from late 2017 onwards, the P/OP ratio exhibits significant volatility. An initial range between roughly 4 to 5 transitions into a sharp spike exceeding 179 in late 2019, indicating an anomalous valuation point or possible earnings disruption. Following this peak, the ratio declines but remains variable, mostly ranging between 6 and 34 through 2020 and 2021. From 2022 onwards, the ratio stabilizes at lower levels around 6 to 7, before sporadically increasing again. Such fluctuations suggest varying investor confidence in operating profitability and possibly reflect external market or company-specific events affecting profit metrics.

Price to Sales (P/S) Ratio

The P/S ratio is recorded starting from September 2017, showing moderate variation around values between 0.6 and 1.3 for most periods. It peaks around 1.32 in early 2020 and again reaches elevated values above 1.3 in parts of 2021, indicating periodic market enthusiasm relative to sales. The ratio generally remains below 1.1 in many other quarters, suggesting a relatively conservative sales valuation metric in certain periods. The overall trend reflects cyclical investor sentiment linked to revenue expectations.

Price to Book Value (P/BV) Ratio

The P/BV ratio shows a general declining trend from early periods around 2.11 and 2.22 down to lows below 1.0 in late 2022 and early 2023, followed by a modest recovery towards 1.7 by the last recorded quarter. Several fluctuations punctuate this trend, with some quarters showing sudden upticks. The downward trajectory up to 2023 suggests erosion in market valuation relative to the company's net asset base, whereas recent upticks could indicate improving market perceptions or asset revaluations.

In summary, these financial ratios indicate a period of high valuation volatility, with some extreme spikes in P/E and P/OP ratios around 2019 and early 2021, reflecting shifts in market sentiment and earnings expectations. The P/S ratio remains relatively stable with moderate peaks, whereas the P/BV ratio points to a declining valuation relative to book value until recent signs of recovery. These patterns collectively underscore a dynamic valuation environment likely influenced by operational performance, market conditions, and investor outlook over the assessed periods.

The data reveals several notable trends in the share price, earnings per share (EPS), and price-to-earnings (P/E) ratio over the quarters examined.

Share Price

The share price exhibits significant volatility throughout the period. Initially, the price shows a downward trend from US$86.09 in late September 2017 to a low point around US$37.84 in early July 2020. Subsequently, a recovery phase is observed, with the price increasing to approximately US$69.61 by April 2021, followed by intermittent fluctuations. The later quarters indicate a decline again, reaching a minimum near US$32.88 in March 2023, before rebounding to US$57.32 by December 2023. This pattern suggests a cyclical price behavior influenced by market conditions or company performance uncertainties.

Earnings Per Share (EPS)

EPS data is available starting from March 2018. Early EPS figures demonstrate variability, with positive earnings of US$2.32 in March 2018, then a decline to US$0.68 by June 2019, and negative values following soon after. The company recorded a sequence of negative earnings from late 2019 into 2020, with the EPS reaching as low as -US$7.58 in September 2023. However, intermittently, there are small rebounds into positive territory, notably between January and October 2021. Overall, the EPS trend suggests challenges in profitability, with losses dominating the recent quarters.

Price-to-Earnings (P/E) Ratio

The P/E ratio data is sparse but provides insight into valuation shifts. During periods of positive EPS, notably between March 2018 and June 2019, P/E ratios vary substantially—from a high of 69.51 to a low near 16.4. In early 2021, a peak ratio of 113.07 is observed, corresponding with positive EPS and share price recovery. The shrinking availability of P/E values in recent quarters coincides with negative EPS values, which typically renders P/E calculation non-meaningful. Fluctuations and extreme values in P/E ratios reflect market volatility and varying investor confidence over time.

In summary, the share price movements are marked by periods of decline and recovery, broadly mirroring the profitability challenges revealed by EPS figures. Negative earnings in recent years coincide with decreased share prices and an absence of meaningful P/E ratios. This composite picture suggests financial instability with episodic improvement phases, indicating underlying business or market challenges affecting valuation and profitability.

The share price exhibits considerable volatility over the periods analyzed. Initially, it declines steadily from a high of approximately 86 US dollars in late September 2017 to a low near 34.58 US dollars by late 2022. This downward trend is intermittently interrupted by brief recoveries, notably in early 2020 and throughout 2021, where the share price temporarily rises above 60 US dollars. The last data point shows a recovery to 57.32 US dollars in late December 2023, suggesting some rebound after the low point in late 2022.

Operating profit per share data begins from the first quarter of 2018 and reveals fluctuations with a predominantly downward tendency over the time frame. Starting at 12.41 US dollars, it declines sharply over the next few quarters, even turning negative in several periods between late 2019 and early 2020. Following this downturn, the operating profit per share recovers moderately, reaching positive values and peaking around 8 US dollars in early 2022. However, this is again followed by a decline in subsequent quarters, ending at a negative value of -5.92 US dollars at the end of 2023.

The price to operating profit ratio (P/OP) displays considerable oscillations, reflecting the combined effects of share price and profit per share movements. Initially, ratios are relatively moderate between 4 and 10, experiencing an extreme spike to 179.17 in mid-2019, which corresponds to periods of very low or negative operating profits. Following this, the ratio stabilizes somewhat, maintaining levels between approximately 6 and 34 from late 2020 through early 2022, indicating variable but generally subdued profitability relative to share price. It rises sharply again to 19.1 during late 2022 amidst negative operating profits, and thereafter specific data points are missing, limiting further trend analysis in the final periods.

Overall, the data indicates a period of notable financial stress in operating performance around late 2019 through early 2020, reflected in negative profits and extreme fluctuations in valuation metrics. There is evidence of partial recovery in 2021 and early 2022, but challenges persist as operating profits decline again toward the end of the observed period. Share price movements somewhat lag these operating results, with delayed recoveries and enduring volatility. The price to operating profit ratio further underscores the instability and market uncertainty during periods of negative profitability.

The analysis of the quarterly data reveals notable fluctuations and trends in the share price, sales per share, and price-to-sales (P/S) ratio over the observed periods.

Share Price

The share price exhibited a general downward trend from late 2017 through late 2019, declining from above $80 to around the $50 range. A notable rebound occurred at the beginning of 2020, with the price rising to nearly $69 before falling sharply again mid-2020 to below $40. Subsequently, there was a period of recovery and moderate volatility throughout 2021 and 2022, characterized by a peak above $60 and several declines thereafter. Toward the end of the observed series in late 2023, the share price increased again, reaching over $57.

Sales per Share

Sales per share data starts from the third quarter of 2018, showing a declining trend from approximately $71 to a low of around $35 by the last quarter of 2023. This steady decrease indicates a reduction in the company's sales on a per-share basis over time, with a more pronounced drop after 2021. Despite some minor fluctuations, the overall momentum is downward.

Price-to-Sales (P/S) Ratio

The P/S ratio demonstrates considerable variability throughout the period. Initially, it ranged between 0.69 and 1.32, indicating mixed market valuation relative to sales. Periods of P/S above 1 were observed intermittently, especially during rebounds in share price. However, several quarters show dips below 1, reflecting times when the share price was valued less favorably compared to the sales generated per share. Toward the end of the analyzed period, the P/S ratio increased to above 1.6, suggesting an improved market valuation relative to sales despite declining sales per share, possibly driven by share price gains.

Overall, the data suggests that while sales per share have generally decreased, the share price and P/S ratio have experienced cycles of decline and recovery. The late 2023 increase in both share price and P/S ratio may indicate renewed investor confidence or market factors supporting a higher valuation relative to sales, despite the downward sales trend. This divergence between sales performance and market valuation warrants further investigation to understand underlying causes such as changes in profitability, cost structure, or market sentiment.

The share price exhibited notable volatility over the observed periods. Initially, the price declined steadily from a high of 86.09 US$ in September 2017 to a low of 37.84 US$ by July 2020. Subsequently, it experienced a recovery phase reaching 69.61 US$ in April 2021, followed by fluctuations that saw the price drop again to mid-30s in late 2022 and early 2023. The final recorded value shows an upward movement to 57.32 US$ by December 2023.

The book value per share (BVPS) remained relatively stable compared to the share price but showed a slight overall declining trend. Starting at 40.77 US$ in September 2017, it decreased gradually to around 30.84 US$ by April 2020. After this point, it experienced minor fluctuations, reaching a short-term peak of 38.41 US$ in April 2022, but with a general tendency to decline subsequently, ending near 33.59 US$ in December 2023.

The price-to-book value ratio (P/BV) mirrored the volatility seen in the share price, reflecting changing market sentiment relative to the underlying book value. Initially, the ratio was above 2.0 in late 2017, indicating that the shares traded at more than twice the book value. It then declined significantly to below 1.3 in late 2018 and remained close to or below this level through mid-2020, reaching a low of around 1.2. This was followed by a rebound to over 2.1 in early 2021, signifying renewed investor confidence or optimism during that period. It subsequently tapered off again, dropping below 1.0 at certain points in 2022 and early 2023, suggesting periods where the market valued the company below its book value, before climbing back to 1.71 by the end of 2023.

Overall, the data indicate a cyclical pattern with periods of decline and recovery in the share price closely linked to variations in the price-to-book value ratio, while the book value per share showed more gradual changes over time. The fluctuations in the P/BV ratio highlight shifts in market perception relative to the company’s net asset value, with notable undervaluation phases occurring in late 2022 and early 2023, and relatively higher valuations during early 2021. These trends illustrate the dynamic nature of market sentiment and company valuation within the covered timeframe.