Workday (WDAY) AI Stock Analysis

• Market Cap: $61.70B
• Dividend Yield: N/A
• Average Volume (3M): 3.64M
• Price to Earnings (P/E): 106.9
• Beta (1Y): 1.14
• Revenue Growth: 14.21%
• EPS Growth: -62.56%
• Country: US
• Employees: 20,482
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Application
• EPS (TTM): 2.21
• Shares Outstanding: 217,000,000
• 10 Day Avg. Volume: 4,101,101
• 30 Day Avg. Volume: 3,640,323
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 6.44
• Enterprise Value/Gross Profit: 8.27
• Enterprise Value/Ebitda: 55.35
• 1Y Price Target: $279.36
• Price Target Upside: 20.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 28

• Rating: 73 Outperform
• Price Target: $255.00 ▲(10.35% Upside)

Workday's overall stock score is driven by strong financial performance and positive earnings call insights, highlighting robust growth and strategic initiatives. However, the high P/E ratio and bearish technical indicators weigh on the score. The company's strategic focus on AI and market expansion positions it well for future growth, but valuation concerns and technical trends warrant caution.

Positive Factors

AI Momentum

Strong AI momentum, with over 75% of net new deals including at least one AI product, positions Workday well to leverage its HR/Finance data for efficiency gains and increased customer spend.

Partnership Expansion

An expanding partner network driving new business and supporting Workday’s momentum in the market, with more than 20% of NNACV signed from partners for the second quarter in a row.

Negative Factors

Competitive Pressures

Competition is fierce, software under pressure, and the macro treacherous.

Revenue Growth Concerns

The decelerating cRPO growth rate and an unchanged organic FY25 subscription revenue guide leave open the durability of growth question.

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 recurring basis for access to Workday's applications, which can be customized according to their specific needs. The company also earns revenue from professional services, including implementation, training, and support services that help clients maximize the value of their Workday solutions. Additionally, Workday has established strategic partnerships with various organizations, enhancing its market reach and contributing to its earnings through integrated solutions and co-marketing efforts. The combination of a strong subscription model and professional services creates a steady stream of recurring revenue, which is critical to Workday's financial stability and growth.

Workday Financial Statement Overview

Summary

Workday demonstrates strong financial health with consistent revenue growth and efficient cost management. The balance sheet is solid with low leverage, and cash flows are positive with room for further optimization. While profitability metrics show potential for improvement, the company's financial position is stable and well-positioned for future growth.

Income Statement

Workday's income statement shows a solid performance with a consistent revenue growth rate, reaching 3.13% in the TTM period. The gross profit margin is strong at 77.88%, indicating efficient cost management. However, the net profit margin is relatively low at 6.52%, suggesting room for improvement in profitability. The EBIT and EBITDA margins have improved over time, reflecting better operational efficiency.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.086 in the TTM period, indicating low financial leverage and a strong equity position. The return on equity is modest at 6.52%, but the equity ratio is healthy, showing a solid capital structure. The company has effectively reduced its debt over time, enhancing financial stability.

Cash Flow

Cash flow analysis reveals a positive trajectory with a free cash flow growth rate of 3.10% in the TTM period. The operating cash flow to net income ratio is 0.52, indicating good cash generation relative to net income. The free cash flow to net income ratio is high at 0.92, reflecting strong cash conversion. However, there is potential to further improve cash flow efficiency.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.94B	8.42B	7.20B	6.20B	5.15B	4.30B
Gross Profit	6.96B	6.35B	5.43B	4.48B	3.72B	3.11B
EBITDA	1.04B	1.08B	752.00M	206.76M	376.51M	87.33M
Net Income	583.00M	526.00M	1.38B	-366.75M	29.00M	-282.43M
Balance Sheet
Total Assets	17.96B	17.98B	16.45B	13.49B	10.50B	8.72B
Cash, Cash Equivalents and Short-Term Investments	8.19B	8.02B	7.81B	6.12B	3.64B	3.54B
Total Debt	791.00M	3.36B	3.30B	3.25B	2.10B	2.24B
Total Liabilities	8.79B	8.94B	8.37B	7.90B	5.96B	5.44B
Stockholders Equity	9.17B	9.03B	8.08B	5.59B	4.54B	3.28B
Cash Flow
Free Cash Flow	2.39B	2.19B	1.91B	1.30B	1.38B	1.01B
Operating Cash Flow	2.59B	2.46B	2.15B	1.66B	1.65B	1.27B
Investing Cash Flow	-1.69B	-1.78B	-1.75B	-2.51B	-1.61B	-1.24B
Financing Cash Flow	-1.29B	-1.15B	-268.00M	1.20B	110.25M	625.05M

Workday Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 231.08
• 50DMA: Positive
• 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 Positive. The current price of 231.08 is above the 20-day moving average (MA) of 225.96, above the 50-day MA of 230.55, and below the 200-day MA of 247.38, indicating a neutral trend. The MACD of 0.26 indicates Negative momentum. The RSI at 52.94 is Neutral, neither overbought nor oversold. The STOCH value of 78.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WDAY.

Workday Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	78 Outperform	$12.97B	30.32	25.76%	0.67%	10.21%	-10.56%
WDAY	73 Outperform	$61.70B	106.87	6.66%	―	14.21%	-62.56%
DDOG	68 Neutral	$47.46B	393.18	4.45%	―	26.00%	-25.64%
SNOW	68 Neutral	$75.27B	―	-42.45%	―	28.37%	-35.49%
BL	65 Neutral	$3.32B	43.13	23.79%	―	7.99%	-28.47%
Sector *	61 Neutral	$35.55B	8.91	-10.55%	1.87%	8.47%	-8.26%
TEAM	58 Neutral	$45.23B	―	-21.58%	―	19.66%	15.17%

Workday Corporate Events

Workday Announces Acquisition of AI Firm Paradox

On August 21, 2025, Workday, Inc. announced a definitive agreement to acquire Paradox, an AI company focused on enhancing the candidate experience in high-volume hiring industries. This strategic acquisition aims to integrate Paradox’s AI-driven recruiting capabilities into Workday’s platform, promising to transform hiring processes and improve efficiency in finding, hiring, and onboarding workers across various roles. The transaction is expected to close in the third quarter of Workday’s fiscal year 2026, subject to regulatory approvals, and is anticipated to strengthen Workday’s position in the talent acquisition market by offering a comprehensive AI-powered suite.

Workday Holds Annual Meeting, Elects New Board Members

On June 4, 2025, Workday held its Annual Meeting of Stockholders where key decisions were made, including the election of four directors to the Board, the ratification of Ernst & Young LLP as the independent accounting firm, and the approval of executive compensation. These decisions reflect Workday’s ongoing commitment to strong governance and financial oversight, which are crucial for maintaining its competitive position in the software industry.