WDCWestern Digital
Is the business good?
A genuinely good business: 7 of 9 health tests passed, earnings fully cash-backed (0.9×), and margins widening.
High fundamental quality. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 68% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is WDC?
Western Digital earns 42% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 33 points above what the capital costs: growth creates value
- Operating margin
- 34%
Operating margin · Computer Hardware median 0.31% · 12 months to Q4 2026
- Cash conversion
- 0.93×
Cash conversion · 0.92× a year ago · operating cash flow covers the operating profit after tax
- R&D as % of revenue
- 9.0%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2021 | 7.2% |
| FY2022 | 13% |
| FY2023 | −8.8% |
| FY2024 | −6.4% |
| FY2025 | 25% |
| FY2026 | 34% |
Details›
- Gross margin12 months to Q4 2026
- 49%
- Operating margin12 months to Q4 2026
- 34%
- Net margin12 months to Q4 2026
- 73%
- Free cash flow margin
- 27%
- R&D as % of revenue
- 9.0%
- Revenue, trailing twelve months
- $12.9B
- Free cash flow, trailing twelve months
- $3.51B
- Net income, trailing twelve months
- $9.42B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 42%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Computer Hardware
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