• If you are wondering whether Western Digital stock still offers value after a big run, this article walks through the numbers that matter most.
• The share price last closed at US$732.62, with reported returns of 12.1% over 7 days, 51.3% over 30 days, 290.3% year to date, and a very large gain over 1 year and 3 years.
• Recent headlines around Western Digital have focused on its role in data storage and memory solutions, along with investor interest in companies linked to data growth and computing needs. These themes help explain why the stock price has been so active and why valuation has become a key question.
• On Simply Wall St's valuation checks, Western Digital currently scores 4 out of 6. The next sections will walk through what different valuation approaches are signaling today and will point to a more complete way to think about value at the end of the article.

Approach 1: Western Digital Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what Western Digital stock could be worth by projecting its future cash flows and then discounting those back to today using an appropriate rate. It focuses on cash generated for shareholders rather than accounting earnings.

For Western Digital, the latest twelve month Free Cash Flow (FCF) is reported at about $2.7b. Simply Wall St uses a 2 Stage Free Cash Flow to Equity model, combining analyst forecasts with its own extrapolations after analyst coverage ends. In this model, projected annual FCF reaches $13.9b by 2030, with interim years between 2026 and 2035 supported first by analyst inputs and then by extended estimates.

Aggregating and discounting these projected cash flows results in an estimated intrinsic value of about $931.56 per share. Compared with the recent share price of $732.62, the model suggests Western Digital trades at a 21.4% discount. This points to the stock being undervalued on this DCF view.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Western Digital is undervalued by 21.4%. Track this in your watchlist or portfolio, or discover 44 more high quality undervalued stocks.

Approach 2: Western Digital Price vs Earnings (P/E)

For profitable companies like Western Digital, the P/E ratio is a common way to think about value because it directly links what you pay for the stock to the earnings the company generates. A higher or lower P/E often reflects how the market views a company’s potential and risks.

In simple terms, stronger expected growth and lower perceived risk can support a higher “normal” or “fair” P/E, while slower growth or higher risk usually calls for a lower multiple. Western Digital currently trades on a P/E of 39.77x. That sits above the broader Tech industry average P/E of about 24.66x, yet below the peer group average of 63.87x.

Simply Wall St’s “Fair Ratio” is a proprietary estimate of what Western Digital’s P/E might reasonably be, given factors like its earnings growth profile, industry, profit margins, market cap and key risks. Because it blends these company specific inputs, the Fair Ratio of 59.27x can give a more tailored benchmark than a simple comparison with broad industry or peer averages. Setting this Fair Ratio against the actual P/E of 39.77x indicates that Western Digital trades below that tailored benchmark.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Western Digital Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach your own story about Western Digital to hard numbers by linking what you believe about its AI storage cycle, margin potential and competitive risks to specific forecasts for revenue, earnings and margins, then turning that into a Fair Value you can compare with the current share price.

On the Community page, you can pick or adjust a Narrative that matches your view, whether that is closer to a higher Fair Value around US$685.00 with assumptions like faster revenue growth and earnings of US$11.9b by about 2029, or a more cautious view nearer US$226.76 with slower growth and earnings of US$4.4b. The platform will automatically refresh those Fair Values when new news, results or forecasts are added so you can more easily judge whether Western Digital looks expensive or cheap against your own story rather than relying only on a single P/E or analyst target.

Do you think there's more to the story for Western Digital? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.