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Workday (WDAY) Registers a Bigger Fall Than the Market: Important Facts to Note

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Workday (WDAY - Free Report) ended the recent trading session at $222.22, demonstrating a -3.12% change from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 1.6%. At the same time, the Dow lost 1.23%, and the tech-heavy Nasdaq lost 2.24%.

Shares of the maker of human resources software witnessed a loss of 5.12% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 4.45%, and the S&P 500's gain of 2.25%.

Market participants will be closely following the financial results of Workday in its upcoming release. It is anticipated that the company will report an EPS of $2.09, marking a 19.43% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $2.34 billion, reflecting a 12.22% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $8.7 per share and revenue of $9.5 billion, indicating changes of +19.18% and +12.45%, respectively, compared to the previous year.

Any recent changes to analyst estimates for Workday should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. 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 26.35. This indicates a discount in contrast to its industry's Forward P/E of 28.71.

Meanwhile, WDAY's PEG ratio is currently 1.4. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Software was holding an average PEG ratio of 2.32 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 75, placing it within the top 31% of over 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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