Workday (WDAY) Stock Sinks As Market Gains: Here's Why
Workday (WDAY) ended the recent trading session at $237.15, demonstrating a -1.46% swing from the preceding day's closing price. The stock's performance was behind the S&P 500's daily gain of 0.01%. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.08%.
The maker of human resources software's shares have seen a decrease of 7.55% over the last month, not keeping up with the Computer and Technology sector's gain of 1.03% and the S&P 500's gain of 1.21%.
The investment community will be closely monitoring the performance of Workday in its forthcoming earnings report. On that day, Workday is projected to report earnings of $1.72 per share, which would represent year-over-year growth of 12.42%. Simultaneously, our latest consensus estimate expects the revenue to be $2.13 billion, showing a 13.98% escalation compared to the year-ago quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $6.96 per share and a revenue of $8.39 billion, indicating changes of +19.18% and +15.59%, respectively, from the former year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Workday. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 5.62% higher within the past month. Workday is currently sporting a Zacks Rank of #1 (Strong Buy).
From a valuation perspective, Workday is currently exchanging hands at a Forward P/E ratio of 34.56. This expresses a premium compared to the average Forward P/E of 30.46 of its industry.
Investors should also note that WDAY has a PEG ratio of 1.65 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Software stocks are, on average, holding a PEG ratio of 2.01 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 73, positioning it in the top 29% 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.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Workday, Inc. (WDAY) : Free Stock Analysis Report