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Workday (WDAY) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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Workday (WDAY - Free Report) closed the most recent trading day at $229.38, moving -3.49% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.37%. Elsewhere, the Dow saw a downswing of 0.74%, while the tech-heavy Nasdaq depreciated by 0.03%.

Shares of the maker of human resources software witnessed a loss of 0.03% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 4.58%, and the S&P 500's gain of 2.68%.

Investors will be eagerly watching for the performance of Workday in its upcoming earnings disclosure. The company is expected to report EPS of $2.09, up 19.43% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.34 billion, up 12.22% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $8.7 per share and revenue of $9.5 billion. These totals would mark changes of +19.18% and +12.44%, respectively, from last year.

Any recent changes to analyst estimates for Workday should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 last 30 days, the Zacks Consensus EPS estimate has moved 0.05% lower. At present, Workday boasts a Zacks Rank of #3 (Hold).

In the context of valuation, Workday is at present trading with a Forward P/E ratio of 27.31. For comparison, its industry has an average Forward P/E of 28.48, which means Workday is trading at a discount to the group.

Also, we should mention that WDAY has a PEG ratio of 1.45. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.18 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 73, putting it in the top 30% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WDAY in the coming trading sessions, be sure to utilize Zacks.com.


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