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Workday (WDAY) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Workday (WDAY - Free Report) closed at $196.78, marking a -0.89% move from the previous day. This change lagged the S&P 500's daily loss of 0.16%. At the same time, the Dow added 0.01%, and the tech-heavy Nasdaq lost 0.26%.

Heading into today, shares of the maker of human resources software had gained 4.06% over the past month, outpacing the Computer and Technology sector's loss of 0.03% and the S&P 500's loss of 0.19% in that time.

Investors will be hoping for strength from WDAY as it approaches its next earnings release, which is expected to be May 28, 2019. On that day, WDAY is projected to report earnings of $0.41 per share, which would represent year-over-year growth of 24.24%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $814.68 million, up 31.69% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.66 per share and revenue of $3.55 billion, which would represent changes of +22.06% and +25.88%, 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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. WDAY currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, WDAY is holding a Forward P/E ratio of 119.77. Its industry sports an average Forward P/E of 52.58, so we one might conclude that WDAY is trading at a premium comparatively.

Meanwhile, WDAY's PEG ratio is currently 4.56. 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 industry currently had an average PEG ratio of 3.32 as of yesterday's close.

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 29% of all 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.




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