Workday (WDAY) AI Stock Analysis

• Market Cap: $56.71B
• Dividend Yield: N/A
• Average Volume (3M): 2.77M
• Price to Earnings (P/E): 90.5
• Beta (1Y): 1.06
• Revenue Growth: 13.35%
• EPS Growth: -60.76%
• Country: US
• Employees: 20,482
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 2.32
• Shares Outstanding: 213,000,000
• 10 Day Avg. Volume: 4,298,310
• 30 Day Avg. Volume: 2,769,188
• PEG Ratio: -2.11
• Price to Book (P/B): 7.69
• Price to Sales (P/S): 8.26
• P/FCF Ratio: 31.76
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 6.67
• Enterprise Value/Gross Profit: 8.87
• Enterprise Value/Ebitda: 51.16
• 1Y Price Target: $278.92
• Price Target Upside: 29.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 29
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $236.00 ▲(9.45% Upside)

Workday's overall stock score is driven by its strong financial performance and positive earnings call, highlighting robust revenue growth and strategic initiatives in AI. However, the high valuation and bearish technical indicators weigh down the score. Investors should consider the potential for operational improvements and market conditions when evaluating the stock.

Positive Factors

AI Product Adoption

The adoption of AI products enhances Workday's competitive edge, driving growth and innovation, and solidifying its position in the enterprise software market.

Strategic Partnerships

Partnership with Google Cloud enhances Workday's data capabilities, providing customers with AI-powered insights, which can lead to increased customer satisfaction and retention.

Strong Revenue Growth

Consistent subscription revenue growth indicates strong demand for Workday's services, supporting long-term financial stability and market expansion.

Negative Factors

Profitability Concerns

Low net profit margin suggests potential challenges in achieving higher profitability, which could impact long-term financial performance if not addressed.

Higher Education Challenges

Issues in the higher education sector could limit growth opportunities in this market, affecting Workday's ability to expand its customer base in this segment.

Federal Market Challenges

Fiscal funding issues in federal and SLED markets may hinder Workday's growth in these sectors, potentially affecting revenue from government contracts.

Workday Business Overview & Revenue Model

Company Description

Workday, Inc. provides enterprise cloud applications in the United States and internationally. The company's applications help its customers to plan, execute, analyze, and extend to other applications and environments, and to manage their business and operations. It offers a suite of financial management applications, which enable chief financial officers to maintain accounting information in the general ledger; manage financial processes; identify real-time financial, operational, and management insights; enhance financial consolidation; reduce time-to-close; promote internal control and auditability; and achieve consistency across finance operations. The company also provides cloud spend management solutions that helps organizations to streamline supplier selection and contracts, manage indirect spend, and build and execute sourcing events, such as requests for proposals; Human Capital Management (HCM) solution, a suite of human capital management applications that allows organizations to manage the entire employee lifecycle from recruitment to retirement, and enables HR teams to hire, onboard, pay, develop, reskill, and provide employee experiences; Workday applications for planning; and applications for analytics and reporting, including augmented analytics to surface insights to the line of business in simple-to-understand stories, machine learning to drive efficiency and automation, and benchmarks to compare performance against other companies. It serves professional and business services, financial services, healthcare, education, government, technology, media, retail, and hospitality industries. The company was formerly known as North Tahoe Power Tools, Inc. and changed its name to Workday, Inc. in July 2005. Workday, Inc. was incorporated in 2005 and is headquartered in Pleasanton, California.

How the Company Makes Money

Workday generates revenue primarily through subscription fees for its cloud-based software solutions. Customers typically pay on a subscription basis, which can include annual fees based on the number of users or a flat rate depending on the services utilized. Key revenue streams include Human Capital Management (HCM) and Financial Management solutions, both of which have shown strong growth as organizations increasingly transition to cloud-based systems. Additionally, Workday offers professional services, such as implementation and consulting, which contribute to its earnings. The company has formed significant partnerships with various organizations, enhancing its market reach and integration capabilities, thus driving customer adoption and retention. Factors contributing to its earnings include a strong focus on customer satisfaction, continuous product innovation, and a growing demand for cloud-based enterprise solutions.

Workday Financial Statement Overview

Summary

Workday exhibits strong financial performance with consistent revenue growth, robust profit margins, and a solid balance sheet with low leverage. The company effectively manages its cash flows, ensuring financial stability and growth potential. However, there is room for improvement in operational efficiency to enhance EBIT margins further.

Income Statement

Workday's income statement shows a solid performance with a consistent revenue growth rate of 3.13% TTM, supported by a strong gross profit margin of 82.06%. The net profit margin has improved to 6.96% TTM, indicating enhanced profitability. However, the EBIT margin is relatively low at 6.65% TTM, suggesting room for operational efficiency improvements.

Balance Sheet

The balance sheet reflects a strong financial position with a low debt-to-equity ratio of 0.09 TTM, indicating low leverage and financial stability. The return on equity is moderate at 6.52% TTM, showing a reasonable return on shareholders' investments. The equity ratio is robust, highlighting a solid capital structure.

Cash Flow

Workday's cash flow statement is strong, with a free cash flow growth rate of 8.07% TTM, indicating healthy cash generation. The operating cash flow to net income ratio of 0.55 TTM suggests efficient conversion of income into cash. The free cash flow to net income ratio of 0.93 TTM demonstrates effective cash management.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.42B	7.20B	6.20B	5.15B	4.30B
Gross Profit	6.35B	5.43B	4.48B	3.72B	3.11B
EBITDA	1.08B	752.00M	206.76M	376.51M	87.33M
Net Income	526.00M	1.38B	-366.75M	29.00M	-282.43M
Balance Sheet
Total Assets	17.98B	16.45B	13.49B	10.50B	8.72B
Cash, Cash Equivalents and Short-Term Investments	8.02B	7.81B	6.12B	3.64B	3.54B
Total Debt	3.36B	3.30B	3.25B	2.10B	2.24B
Total Liabilities	8.94B	8.37B	7.90B	5.96B	5.44B
Stockholders Equity	9.03B	8.08B	5.59B	4.54B	3.28B
Cash Flow
Free Cash Flow	2.19B	1.91B	1.30B	1.38B	1.01B
Operating Cash Flow	2.46B	2.15B	1.66B	1.65B	1.27B
Investing Cash Flow	-1.78B	-1.75B	-2.51B	-1.61B	-1.24B
Financing Cash Flow	-1.15B	-268.00M	1.20B	110.25M	625.05M

Workday Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 215.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDAY, the sentiment is Negative. The current price of 215.62 is below the 20-day moving average (MA) of 226.79, below the 50-day MA of 233.60, and below the 200-day MA of 238.64, indicating a bearish trend. The MACD of -3.63 indicates Positive momentum. The RSI at 39.97 is Neutral, neither overbought nor oversold. The STOCH value of 46.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WDAY.

Workday Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	75 Outperform	$9.05B	19.99	28.56%	0.93%	9.72%	-2.69%
WDAY	69 Neutral	$56.71B	90.53	7.34%	―	13.35%	-60.76%
DDOG	69 Neutral	$55.55B	536.59	3.52%	―	26.63%	-46.13%
BL	67 Neutral	$3.39B	52.04	21.85%	―	7.36%	-40.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SNOW	61 Neutral	$84.25B	―	-42.45%	―	28.37%	-35.49%
TEAM	59 Neutral	$39.49B	―	-15.35%	―	19.51%	53.35%

Workday Corporate Events

Workday Reports Strong Q3 Growth and Strategic Advances

Workday, Inc. is an enterprise AI platform specializing in managing people, money, and agents, serving over 11,000 organizations worldwide, including a significant portion of the Fortune 500. The company operates primarily in the cloud-based enterprise software sector, offering unique solutions that integrate HR and finance functions on a single platform.

Workday Approves $4 Billion Stock Repurchase Plan

On September 16, 2025, Workday announced that its Board of Directors has approved an additional $4 billion for the repurchase of its Class A common stock, as part of its Share Repurchase Program. This initiative, which aims to repurchase approximately $5 billion of stock by fiscal 2027, reflects Workday’s strategic approach to managing its capital and enhancing shareholder value, with the timing and amount of repurchases being influenced by various market and regulatory conditions.

The most recent analyst rating on (WDAY) stock is a Buy with a $325.00 price target. To see the full list of analyst forecasts on Workday stock, see the WDAY Stock Forecast page.

Workday Acquires Sana Labs for $1.1 Billion

On September 15, 2025, Workday announced a definitive agreement to acquire Sana Labs AB, an AI company known for its enterprise knowledge tools, for approximately $1.1 billion. This acquisition aims to enhance Workday’s platform by integrating Sana’s AI-powered search, agents, and learning capabilities, creating a more proactive and personalized employee experience. The transaction, expected to close by January 31, 2026, will allow Sana to continue developing its core products, Sana Learn and Sana Agents, while accelerating its growth and innovation. This strategic move is anticipated to position Workday as a leader in enterprise AI, offering enhanced tools for employee learning and productivity, although it carries risks related to transaction completion and expected benefits.

The most recent analyst rating on (WDAY) stock is a Buy with a $251.00 price target. To see the full list of analyst forecasts on Workday stock, see the WDAY Stock Forecast page.

Workday’s Earnings Call Highlights Growth and AI Focus

Workday’s recent earnings call highlighted a period of robust growth and strategic advancements, underscored by significant achievements in AI integration and market expansion. While the company celebrated these successes, it also acknowledged challenges in specific segments like state and local government and higher education, which could pose potential headwinds.