Will Q4 Results Move Western Digital Stock Higher?

Forbes

3 days ago

CHONGQING, CHINA - JULY 28: In this photo illustration, a person holds a smartphone displaying the ... More logo of Western Digital Corporation (NASDAQ: WDC), a leading American data storage company known for manufacturing hard drives, solid-state drives, and NAND flash memory, with the company's multicolored logo visible in the background, on July 28, 2025 in Chongqing, China. (Photo illustration by)
Western Digital (NASDAQ: WDC is scheduled to announce its fiscal fourth-quarter earnings on Wednesday, July 30, 2025. Analysts expect adjusted earnings of $1.48 per share on $2.47 billion in revenue, indicating a year-over-year increase of 3% in earnings and a 34% drop in revenue, compared to $1.44 per share and $3.76 billion, respectively, reported in the same quarter of the previous year. Importantly, this will be the company's second earnings announcement following the successful completion of its planned separation from SanDisk, a strategic decision that allows Western Digital to concentrate exclusively on its core hard disk drive (HDD) business.
Historically, Western Digital's stock has decreased after earnings announcements 53% of the time, with a median one-day loss of 3.1% and a maximum post-earnings decline of 10%. The company currently has a market capitalization of $24 billion. Its revenue over the last twelve months was $19 billion, and it was operationally profitable, generating $2.5 billion in operating profits and a net income of $1.7 billion.
For event-driven traders, historical performance patterns and the gap between actual earnings results and market expectations can provide valuable insights prior to the upcoming announcement. Traders might choose between two main strategies: positioning themselves ahead of the earnings release by utilizing historical probabilities and consensus forecasts, or reacting after the announcement by assessing how short- and medium-term returns generally align with the reported results. If you are looking for upside with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and achieved returns exceeding 91% since its inception. See earnings reaction history of all stocks.
Western Digital's Historical Chances of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized together with the statistics in the table below.
WDC 1D, 5D, and 21D Post Earnings Return
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (though not effective if the correlation is low) is to comprehend the correlation between short-term and medium-term returns following earnings, identify a pair with the highest correlation, and make the appropriate trade. For instance, if 1D and 5D indicate the highest correlation, a trader can position themselves "long" for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on the 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and subsequent 5D returns.
WDC Correlation Between 1D, 5D, and 21D Historical Returns
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