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Workday (WDAY) Stock Slides as Market Rises: Facts to Know Before You Trade

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Workday (WDAY - Free Report) closed at $186.75 in the latest trading session, marking a -1.95% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.2%. Elsewhere, the Dow saw an upswing of 0.04%, while the tech-heavy Nasdaq appreciated by 0.04%.

Shares of the maker of human resources software witnessed a loss of 5.18% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 4.78%, and the S&P 500's loss of 0.35%.

The investment community will be closely monitoring the performance of Workday in its forthcoming earnings report. The company is expected to report EPS of $2.74, up 18.1% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.69 billion, up 10.6% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $11.12 per share and revenue of $10.66 billion, indicating changes of +20.48% and +11.59%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for Workday. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% higher. Workday is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Workday currently has a Forward P/E ratio of 17.12. This denotes a discount relative to the industry average Forward P/E of 19.07.

We can additionally observe that WDAY currently boasts a PEG ratio of 0.92. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.14.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 93, finds itself in the top 38% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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