Workday (WDAY) AI Stock Analysis

• Market Cap: $57.50B
• Dividend Yield: N/A
• Average Volume (3M): 3.13M
• Price to Earnings (P/E): 91.8
• 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: 2,787,434
• 30 Day Avg. Volume: 3,132,920
• 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: 1.07
• Enterprise Value/Revenue: 6.65
• Enterprise Value/Gross Profit: 8.79
• Enterprise Value/Ebitda: 46.47
• 1Y Price Target: $275.93
• Price Target Upside: 26.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 31
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $246.00 ▲(12.80% Upside)

Workday's strong financial performance and positive earnings call sentiment are major strengths, supported by strategic corporate events. However, high valuation concerns and mixed technical indicators temper the overall score.

Positive Factors

Strong Subscription Revenue Growth

The consistent growth in subscription revenue indicates strong demand for Workday's cloud solutions, supporting long-term revenue stability and market leadership.

AI Product Adoption

The adoption of AI products enhances Workday's competitive edge, driving innovation and customer retention, crucial for sustaining long-term growth.

Strategic Acquisitions

Strategic acquisitions bolster Workday's platform, expanding its AI capabilities and offering a competitive advantage in the enterprise software market.

Negative Factors

Challenges in Higher Education Sector

Difficulties in the higher education sector may limit growth potential in this market, affecting Workday's diversification and revenue streams.

Federal and SLED Market Challenges

Fiscal funding issues in federal and SLED markets could hinder Workday's growth in these sectors, impacting overall revenue diversification.

Low EBIT Margin

A low EBIT margin suggests inefficiencies in operations, which could limit profitability improvements and financial flexibility over time.

Workday Business Overview & Revenue Model

Company Description

Workday, Inc. is a leading provider of enterprise cloud applications for finance and human resources. Founded in 2005, the company primarily serves large and mid-sized organizations across various sectors, delivering a unified suite of applications designed to manage financial management, human capital management, planning, and analytics. With a focus on innovation and user experience, Workday enables businesses to improve efficiency, enhance decision-making, and drive engagement through its comprehensive, integrated cloud platform.

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	8.45B	7.26B	6.22B	5.14B	4.32B
Gross Profit	6.38B	5.49B	4.51B	3.71B	3.12B
EBITDA	1.08B	752.00M	206.00M	377.00M	87.33M
Net Income	526.00M	1.38B	-367.00M	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: 218.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 218.08 is below the 20-day moving average (MA) of 219.63, below the 50-day MA of 227.42, and below the 200-day MA of 235.53, indicating a bearish trend. The MACD of -2.39 indicates Negative momentum. The RSI at 45.87 is Neutral, neither overbought nor oversold. The STOCH value of 24.59 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	76 Outperform	$9.16B	20.23	28.56%	0.91%	9.72%	-2.69%
WDAY	73 Outperform	$57.50B	91.80	7.34%	―	13.35%	-60.76%
BL	71 Outperform	$3.44B	52.81	21.85%	―	7.36%	-40.62%
DDOG	69 Neutral	$49.23B	475.58	3.52%	―	26.63%	-46.13%
TEAM	66 Neutral	$42.54B	-228.79	-15.35%	―	19.51%	53.35%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SNOW	54 Neutral	$76.13B	-55.13	-53.32%	―	28.48%	-19.12%

Workday Corporate Events

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.

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.