Workday (WDAY) AI Stock Analysis

• Market Cap: $59.94B
• Dividend Yield: N/A
• Average Volume (3M): 2.24M
• Price to Earnings (P/E): 104.1
• Beta (1Y): 1.13
• Revenue Growth: 14.21%
• EPS Growth: -62.56%
• Country: US
• Employees: 20,482
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 2.21
• Shares Outstanding: 217,000,000
• 10 Day Avg. Volume: 1,985,623
• 30 Day Avg. Volume: 2,244,866
• 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: 0.96
• Enterprise Value/Revenue: 6.44
• Enterprise Value/Gross Profit: 8.27
• Enterprise Value/Ebitda: 47.73
• 1Y Price Target: $281.46
• Price Target Upside: 25.00% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 29
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: $266.00 ▲(18.13% Upside)

Workday's strong financial performance and positive earnings call sentiment are the primary drivers of its stock score. The company's strategic focus on AI and market expansion supports future growth. However, the high P/E ratio and lack of dividend yield present valuation concerns. Technical indicators suggest a neutral market position.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective product offerings, supporting long-term financial stability.

AI Integration

AI integration enhances product capabilities and competitiveness, driving future growth and innovation in enterprise solutions.

Market Expansion

Expanding into international markets broadens revenue streams and reduces dependence on any single market, enhancing resilience.

Negative Factors

SLED Challenges

Challenges in the SLED market could limit growth in this segment, affecting overall revenue diversification and stability.

Higher Education Pressures

Funding pressures in higher education may constrain growth opportunities, impacting Workday's penetration in this sector.

Low Net Profit Margin

A low net profit margin indicates potential inefficiencies, which could hinder profitability and limit reinvestment capacity.

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	1.21B	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	3.78B	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: Negative
• Last Price: 225.17
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 225.17 is below the 20-day moving average (MA) of 235.95, below the 50-day MA of 234.83, and below the 200-day MA of 241.51, indicating a bearish trend. The MACD of -1.77 indicates Positive momentum. The RSI at 39.49 is Neutral, neither overbought nor oversold. The STOCH value of 19.88 is Positive, 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	$9.12B	20.16	28.56%	0.83%	9.72%	-2.69%
DDOG	72 Outperform	$66.55B	647.83	3.52%	―	26.63%	-46.13%
WDAY	72 Outperform	$59.94B	104.13	6.66%	―	14.21%	-62.56%
SNOW	69 Neutral	$89.69B	―	-42.45%	―	28.37%	-35.49%
BL	67 Neutral	$3.52B	48.92	21.85%	―	7.36%	-40.62%
TEAM	67 Neutral	$41.23B	―	-15.35%	―	19.51%	53.35%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

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.

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.

Workday Reports Strong Q2 Growth and Strategic Expansions

Workday, Inc. is a leading AI platform specializing in managing people, money, and agents, serving over 11,000 organizations globally, including more than 65% of the Fortune 500.

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.

The most recent analyst rating on (WDAY) stock is a Buy with a $315.00 price target. To see the full list of analyst forecasts on Workday stock, see the WDAY Stock Forecast page.