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Workday (WDAY) Gains But Lags Market: What You Should Know

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Workday (WDAY - Free Report) closed the most recent trading day at $159.68, moving +0.08% from the previous trading session. This move lagged the S&P 500's daily gain of 0.85%. Elsewhere, the Dow gained 1.15%, while the tech-heavy Nasdaq added 0.77%.

Prior to today's trading, shares of the maker of human resources software had gained 9.81% over the past month. This has outpaced the Computer and Technology sector's loss of 7.6% and the S&P 500's loss of 9.35% in that time.

WDAY will be looking to display strength as it nears its next earnings release, which is expected to be February 26, 2019. The company is expected to report EPS of $0.32, up 14.29% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $776.59 million, up 33.33% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.27 per share and revenue of $2.81 billion, which would represent changes of +23.3% and +31.1%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for WDAY. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 5.95% higher. WDAY currently has a Zacks Rank of #3 (Hold).

Digging into valuation, WDAY currently has a Forward P/E ratio of 125.78. Its industry sports an average Forward P/E of 46.25, so we one might conclude that WDAY is trading at a premium comparatively.

It is also worth noting that WDAY currently has a PEG ratio of 4.03. 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 2.77 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 30, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.




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