Workday (WDAY Quick QuoteWDAY – Free Report) closed the latest trading day at $205.98, indicating a -0.59% change from the previous session’s end. The stock’s performance was ahead of the S&P 500’s daily loss of 1.18%. Meanwhile, the Dow lost 0.76%, and the Nasdaq, a tech-heavy index, lost 1.76%.
Heading into today, shares of the maker of human resources software had lost 10.23% over the past month, lagging the Computer and Technology sector’s loss of 2.96% and the S&P 500’s loss of 3.35% in that time.
The investment community will be paying close attention to the earnings performance of Workday in its upcoming release. On that day, Workday is projected to report earnings of $1.40 per share, which would represent year-over-year growth of 41.41%. In the meantime, our current consensus estimate forecasts the revenue to be $1.84 billion, indicating a 15.33% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.58 per share and revenue of $7.22 billion, indicating changes of +53.3% and +16.14%, respectively, compared to the previous year.
Investors should also pay attention to any latest changes in analyst estimates for Workday. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company’s business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 12.76% higher within the past month. Workday currently has a Zacks Rank of #2 (Buy).
With respect to valuation, Workday is currently being traded at a Forward P/E ratio of 37.12. This valuation marks a premium compared to its industry’s average Forward P/E of 35.52.
We can additionally observe that WDAY currently boasts a PEG ratio of 1.38. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. The average PEG ratio for the Internet – Software industry stood at 1.4 at the close of the market yesterday.
The Internet – Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 72, which puts it in the top 29% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.