In the latest trading session, Workday (WDAY) closed at $129.72, marking a -1.92% move from the previous day. The stock’s performance was behind the S&P 500’s daily gain of 0.44%. On the other hand, the Dow registered a gain of 0.36%, and the technology-centric Nasdaq increased by 0.54%.
Shares of the maker of human resources software witnessed a loss of 12.43% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 2.47%, and the S&P 500’s loss of 3.31%.
Analysts and investors alike will be keeping a close eye on the performance of Workday in its upcoming earnings disclosure. The company’s upcoming EPS is projected at $2.49, signifying a 11.66% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $2.52 billion, indicating a 12.37% growth compared to the corresponding quarter of the prior year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.54 per share and a revenue of $10.66 billion, representing changes of +14.19% and +11.56%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Workday. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Workday is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, Workday is currently trading at a Forward P/E ratio of 12.55. For comparison, its industry has an average Forward P/E of 19.28, which means Workday is trading at a discount to the group.
We can additionally observe that WDAY currently boasts a PEG ratio of 0.62. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. The Internet – Software industry had an average PEG ratio of 1.07 as trading concluded yesterday.