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Workday (WDAY) Gains As Market Dips: What You Should Know

Zacks Equity Research

Workday (WDAY) closed the most recent trading day at $203.86, moving +1.94% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.9%. At the same time, the Dow lost 1.05%, and the tech-heavy Nasdaq lost 0.79%.

Prior to today's trading, shares of the maker of human resources software had lost 7.76% over the past month. This has lagged the Computer and Technology sector's gain of 3.21% and the S&P 500's gain of 1.52% in that time.

WDAY will be looking to display strength as it nears its next earnings release. In that report, analysts expect WDAY to post earnings of $0.35 per share. This would mark year-over-year growth of 12.9%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $872.21 million, up 29.85% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.68 per share and revenue of $3.56 billion. These totals would mark changes of +23.53% and +26.29%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for WDAY. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. WDAY is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, WDAY currently has a Forward P/E ratio of 119.01. This valuation marks a premium compared to its industry's average Forward P/E of 72.41.

Also, we should mention that WDAY has a PEG ratio of 4.4. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 3.57 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 65, putting it in the top 26% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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