Education
About Us
Working with TipRanks
Follow Us
Workday (WDAY)
NASDAQ:WDAY
Top Page
Workday
(NASDAQ:WDAY)
Rating:75Outperform
Price Target:
$268.00
▲(11.99%Upside)
Positive Factors
AI innovations
Workday is introducing gen AI innovations across the platform and improving efficiency.
Financial performance
Workday reported solid results, exceeding expectations for both revenue and operating margins.
Stock repurchase program
Workday announced a new $1 billion stock repurchase program.
Negative Factors
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.
Revenue forecast
Workday's 1Q:FY26 subscription services revenue missed the forecast.
Workday (WDAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$63.70B
Dividend YieldN/A
Average Volume (3M)1.94M
Price to Earnings (P/E)131.4
Beta (1Y)1.14
Revenue Growth15.38%
EPS Growth-67.58%
CountryUS
Employees20,482
SectorTechnology
Sector Strength77
IndustrySoftware - Application
Share Statistics
EPS (TTM)2.23
Shares Outstanding216,635,330
10 Day Avg. Volume2,738,920
30 Day Avg. Volume1,942,965
Financial Highlights & Ratios
PEG Ratio-1.77
Price to Book (P/B)7.00
Price to Sales (P/S)0.00
P/FCF Ratio29.09
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue2.05
Enterprise Value/Gross Profit9.68
Enterprise Value/Ebitda25.87
Forecast
1Y Price Target
$297.00Price Target Upside24.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering30
Workday Business Overview & Revenue Model
Company DescriptionWorkday, Inc. is a leading provider of enterprise cloud applications for finance and human resources. Founded in 2005 and headquartered in Pleasanton, California, Workday delivers financial management, human capital management, and analytics applications designed for the world's largest companies, educational institutions, and government agencies. Its solutions are designed to help organizations adapt quickly to change, optimize their workforce, and manage financial operations more effectively.
How the Company Makes MoneyWorkday 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 Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue streams from different business units, highlighting which segments are driving growth and which may need strategic adjustments.
Analyzes revenue streams from different business units, highlighting which segments are driving growth and which may need strategic adjustments.
Data provided by:
Main Street Data
Main Street DataWorkday Earnings Call Summary
Earnings Call Date:May 22, 2025
(Q1-2026)
| % Change Since: -12.04%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong start to the fiscal year with solid growth in key areas such as subscription revenue, AI product adoption, and industry engagement. Despite some macroeconomic challenges, the company has shown resilience and is confident in its strategic initiatives. The positive aspects significantly outweigh the challenges, indicating a positive overall sentiment.Q1-2026 Updates
Positive Updates
Strong Subscription Revenue Growth
Workday reported a 13% growth in subscription revenue, reaching $2.059 billion, which is in line with their guidance for the fiscal year.
Successful AI Product Adoption
New ACV across AI products more than doubled year-over-year, with around 25% of customer expansions including at least one AI product.
Robust Financials Performance
Non-GAAP operating margin was reported at 30%, exceeding expectations due to moderated headcount growth and revenue outperformance.
Significant New Customer Wins
Established new HCM relationships with major companies, including United Airlines, Pilot Travel Centers, and Mutual of Omaha Insurance Company.
Expansive Partner Ecosystem
Partners contributed more than 20% to net new ACV, and 25 new partner apps were added to the Workday marketplace.
Diverse Industry Growth
Five industries exceeded $1 billion in annual recurring revenue, including Manufacturing, Tech, Media, Financial Services, Retail and Hospitality, and Professional and Business Services.
Increased Federal Sector Engagement
Federal forum attendance was up 65%, highlighting successful engagement with senior government leaders.
Positive Cash Flow and Share Buyback Authorization
Operating cash flow was $457 million, and the board approved a new $1 billion open-ended buyback authorization.
Negative Updates
Macroeconomic Uncertainties
There is heightened macro uncertainty, particularly across certain markets and verticals such as SLED and international markets.
Limited Impact from Restructuring
The restructuring charge impacted GAAP operating income, which was $39 million. However, this was partially offset by other operational efficiencies.
Company Guidance
During Workday's first quarter fiscal 2026 earnings call, the company reported a 13% increase in subscription revenue, reaching $2.059 billion, and a total revenue growth of 13% to $2.24 billion. The non-GAAP operating margin stood at 30.2%, supported by moderated headcount growth and revenue outperformance. The company also noted a 15.6% increase in the 12-month subscription revenue backlog (CRPO) to $7.63 billion and a total subscription revenue backlog of $24.62 billion, up 19%. Workday's investment in AI showed promising results, with new ACV across AI products more than doubling year over year in Q1. Additionally, 25% of customer expansions included AI products. Workday reiterated its subscription revenue guidance for FY 2026 at $8.8 billion and expects Q2 subscription revenue to be approximately $2.16 billion, projecting a 13% growth. The company also announced a new $1 billion open-ended buyback authorization, further emphasizing its strategic focus on driving long-term growth and market expansion.Workday Financial Statement Overview
Summary
Workday displays a strong financial position with significant revenue growth and robust cash flow management. While the high gross profit margin underscores effective cost control, the net profit margin's decline and reduced return on equity highlight areas for improvement in profitability.Income Statement
Workday demonstrated strong revenue growth with a 16.2% increase in Total Revenue over the TTM period. Gross Profit Margin is high at 80.2%, indicating effective cost management. However, the Net Profit Margin dropped to 6.2% from a higher 19.0% the previous year, suggesting increased expenses or reduced profitability. EBIT and EBITDA margins are relatively low at 4.8% and 5.0%, respectively, indicating room for improvement in operating efficiency.85
Very Positive
Balance Sheet
The company's balance sheet is solid, with a low Debt-to-Equity Ratio of 0.04, showing minimal reliance on debt financing. Return on Equity is healthy at 5.8%, but has decreased from the previous year, reflecting reduced net income. The Equity Ratio is robust at 50.3%, indicating a strong equity base relative to total assets.78
Positive
Cash Flow
Cash flow is a strong point for Workday, with a significant Free Cash Flow Growth Rate of 14.7%. The Operating Cash Flow to Net Income Ratio is high at 4.68, highlighting efficient cash generation from operations. Free Cash Flow to Net Income Ratio is also strong at 4.17, indicating robust cash flow relative to net earnings.90
Very Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.45B | 7.26B | 6.22B | 5.14B | 4.32B | Gross Profit |
| 7.18B | 5.49B | 4.50B | 3.71B | 3.12B | EBIT |
| 415.00M | 183.00M | -222.20M | -116.45M | -248.60M | EBITDA |
| 1.08B | 465.00M | 206.00M | 227.27M | 87.33M | Net Income Common Stockholders |
| 526.00M | 1.38B | -366.75M | 29.00M | -282.43M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 8.02B | 7.81B | 6.12B | 3.64B | 3.54B | Total Assets |
| 17.98B | 16.45B | 13.49B | 10.50B | 8.72B | Total Debt |
| 3.36B | 3.30B | 3.25B | 2.10B | 2.24B | Net Debt |
| 1.82B | 1.28B | 1.36B | 568.48M | 853.88M | 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
Negative
239.30
Price Trends
244.15
Negative
250.54
Negative
250.94
Negative
Market Momentum
4.23
Positive
39.32
Neutral
27.47
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 239.3 is below the 20-day moving average (MA) of 258.41, below the 50-day MA of 244.15, and below the 200-day MA of 250.94, indicating a bearish trend. The MACD of 4.23 indicates Positive momentum. The RSI at 39.32 is Neutral, neither overbought nor oversold. The STOCH value of 27.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WDAY.
Workday Risk Analysis
Workday disclosed 39 risk factors in its most recent earnings report. Workday reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Workday Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $15.11B | 37.30 | 24.99% | 0.58% | 9.86% | -14.34% | |
78 Outperform | $10.90B | 49.23 | 19.70% | ― | 14.63% | 17.15% | |
75 Outperform | $63.70B | 131.42 | 5.70% | ― | 15.38% | -67.58% | |
74 Outperform | $67.03B | 49.32 | 15.83% | ― | 48.30% | 5.09% | |
69 Neutral | $4.66B | 482.28 | 0.97% | ― | 14.52% | ― | |
67 Neutral | $20.17B | 883.93 | 0.38% | ― | 17.24% | ― | |
61 Neutral | $11.29B | 10.17 | -6.88% | 2.97% | 7.41% | -8.93% |
* Technology Sector Average
Performance Comparison
WDAY
Workday
239.30
27.72
13.10%
PAYC
Paycom
261.26
98.84
60.85%
PCTY
Paylocity
197.44
48.95
32.97%
BILL
Bill.com Holdings
45.20
-5.82
-11.41%
GRAB
Grab
4.97
1.33
36.54%
COIN
Coinbase Global
266.40
29.75
12.57%
Workday Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Workday Announces $1 Billion Share Buyback Program
Positive
May 22, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.