Workday (WDAY) AI Stock Analysis

• Market Cap: $65.59B
• Dividend Yield: N/A
• Average Volume (3M): 2.14M
• Price to Earnings (P/E): 135.6
• Beta (1Y): 1.16
• Revenue Growth: 15.38%
• EPS Growth: -67.58%
• Country: US
• Employees: 20,482
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 2.23
• Shares Outstanding: 216,000,000
• 10 Day Avg. Volume: 1,692,118
• 30 Day Avg. Volume: 2,140,561
• PEG Ratio: 0.10
• Price to Book (P/B): 8.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 35.63
• Enterprise Value/Market Cap: 0.73
• Enterprise Value/Revenue: 1.44
• Enterprise Value/Gross Profit: 7.02
• Enterprise Value/Ebitda: 18.12
• 1Y Price Target: $296.93
• Price Target Upside: 20.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 31

• Rating: 72 Outperform
• Price Target: $271.00 ▲(10.32%Upside)

Workday's overall score is driven primarily by strong financial performance and positive earnings call sentiment, indicating robust growth and strategic initiatives. However, technical indicators suggest bearish momentum, and a high P/E ratio raises valuation concerns. The share buyback program and focus on AI adoption are strategic positives, but macroeconomic uncertainties remain a risk.

Positive Factors

Customer Expansion

New ACV across AI products more than doubled, with over 25% of customer expansions including AI products.

Financial Performance

Workday delivered a total revenue of USD2.4bn with non-GAAP operating margin of 30.2%.

Stock Repurchase

Workday announced a new $1 billion stock repurchase program.

Negative Factors

Expectation Miss

Workday's 1Q:FY26 subscription services revenue missed the forecast.

Growth Concerns

Workday reported the lowest growth on record.

Market Reaction

WDAY shares traded a bit lower after-hours despite solid performance, likely due to high expectations following recent stock gains.

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 a subscription-based model, where customers pay for access to its cloud-based applications. The company's key revenue streams include subscription fees for its human capital management (HCM) and financial management applications, which are typically contracted on a multi-year basis. Additionally, Workday offers professional services such as consulting, deployment, and training, which contribute to its revenue. Strategic partnerships with technology providers and system integrators also play a role in expanding Workday's reach and enhancing its offerings, further driving its subscription and service revenues.

Workday Financial Statement Overview

Summary

Workday demonstrates robust revenue growth and maintains strong margins, reflecting efficient operations. The balance sheet is solid with a healthy equity position and manageable debt levels. Cash flow generation is impressive, supporting future strategic initiatives. Overall, Workday is financially stable with positive growth prospects, though it should continue to focus on improving net profitability to enhance shareholder value.

Income Statement

Workday has shown strong revenue growth, increasing from $4.32 billion in 2021 to $8.70 billion TTM (Trailing-Twelve-Months). The gross profit margin is healthy at 77.95% TTM, indicating efficient cost management. However, the net profit margin is relatively low at 5.60% TTM, suggesting high operating expenses or other costs. Despite this, the company has improved its EBIT and EBITDA margins significantly over recent years.

Balance Sheet

The debt-to-equity ratio stands at 0.38 TTM, reflecting a strong equity base compared to its debt. The return on equity is moderate at 5.46% TTM, indicating decent returns for shareholders. The equity ratio is robust at 51.84% TTM, showcasing a stable financial position. The balance sheet reflects a solid foundation with manageable debt levels.

Cash Flow

Workday's operating cash flow is strong, with a TTM figure of $2.55 billion, and the free cash flow has shown consistent growth, reaching $2.32 billion TTM. The free cash flow to net income ratio is high, indicating efficient conversion of earnings into cash. The company's cash flow generation provides flexibility for future investments and debt servicing.

Breakdown
TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
8.70B	8.45B	7.26B	6.22B	5.14B	4.32B
	Gross Profit
6.78B	7.18B	5.49B	4.50B	3.71B	3.12B
	EBIT
390.00M	415.00M	183.00M	-222.20M	-116.45M	-248.60M
	EBITDA
734.00M	1.08B	465.00M	206.00M	227.27M	87.33M
	Net Income Common Stockholders
487.00M	526.00M	1.38B	-366.75M	29.00M	-282.43M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.97B	8.02B	7.81B	6.12B	3.64B	3.54B
	Total Assets
17.21B	17.98B	16.45B	13.49B	10.50B	8.72B
	Total Debt
3.39B	3.36B	3.30B	3.25B	2.10B	2.24B
	Net Debt
2.40B	1.81B	1.27B	1.35B	562.01M	850.28M
	Total Liabilities
8.29B	8.94B	8.37B	7.90B	5.96B	5.44B
	Stockholders Equity
8.92B	9.03B	8.08B	5.59B	4.54B	3.28B
Cash Flow		Free Cash Flow
2.32B	2.19B	1.91B	1.30B	1.38B	1.01B
	Operating Cash Flow
2.55B	2.46B	2.15B	1.66B	1.65B	1.27B
	Investing Cash Flow
-2.05B	-1.78B	-1.75B	-2.51B	-1.61B	-1.24B
	Financing Cash Flow
-1.28B	-1.15B	-268.00M	1.20B	110.25M	625.05M

Workday Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 245.65
• 50DMA: Positive
• 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 245.65 is below the 20-day moving average (MA) of 252.17, above the 50-day MA of 245.25, and below the 200-day MA of 252.08, indicating a neutral trend. The MACD of -0.88 indicates Positive momentum. The RSI at 43.82 is Neutral, neither overbought nor oversold. The STOCH value of 24.06 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	80 Outperform	$14.17B	34.98	24.99%	0.61%	9.86%	-14.34%
COIN	74 Outperform	$66.62B	49.02	15.83%	―	48.30%	5.09%
WDAY	72 Outperform	$65.59B	135.64	5.70%	―	15.38%	-67.58%
PCTY	71 Outperform	$9.77B	44.09	19.70%	―	14.63%	17.15%
BILL	68 Neutral	$4.27B	482.28	0.97%	―	14.52%	―
GRAB	65 Neutral	$18.62B	816.07	0.38%	―	17.24%	―
Sector *	62 Neutral	$11.97B	10.29	-7.47%	2.99%	7.32%	-8.06%

Workday Corporate Events

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.

The most recent analyst rating on (WDAY) stock is a Buy with a $310.00 price target. To see the full list of analyst forecasts on Workday stock, see the WDAY Stock Forecast page.

Workday Announces $1 Billion Share Buyback Program

On May 22, 2025, Workday announced a new share repurchase program authorizing the buyback of up to $1 billion of its Class A common stock, reflecting a strategic move to manage its capital structure and potentially enhance shareholder value. In the fiscal 2026 first quarter, Workday reported a 12.6% increase in total revenues to $2.240 billion, with subscription revenues rising by 13.4% year-over-year. Despite a decrease in operating income due to restructuring expenses, the company saw growth in non-GAAP operating income and cash flows, highlighting its resilience and strategic progress. Workday also introduced new products and expanded its customer base, reinforcing its market position and commitment to innovation.

The most recent analyst rating on (WDAY) stock is a Buy with a $301.00 price target. To see the full list of analyst forecasts on Workday stock, see the WDAY Stock Forecast page.