Workday (WDAY) AI Stock Analysis

• Market Cap: $60.37B
• Dividend Yield: N/A
• Average Volume (3M): 2.80M
• Price to Earnings (P/E): 124.8
• Beta (1Y): 1.15
• Revenue Growth: 15.38%
• EPS Growth: -67.58%
• Country: US
• Employees: 20,482
• Sector: Technology
• Sector Strength: 91
• Industry: Software - Application
• EPS (TTM): 2.23
• Shares Outstanding: 216,000,000
• 10 Day Avg. Volume: 3,518,056
• 30 Day Avg. Volume: 2,799,494
• 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: 1.02
• Enterprise Value/Revenue: 7.11
• Enterprise Value/Gross Profit: 9.41
• Enterprise Value/Ebitda: 57.76
• 1Y Price Target: $289.21
• Price Target Upside: 24.74% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 31

• Rating: 73 Outperform
• Price Target: $259.00 ▲(11.71% Upside)

Workday's overall stock score is driven by strong financial performance and positive earnings call insights, highlighting robust revenue growth and strategic initiatives in AI and global expansion. However, the high P/E ratio suggests potential overvaluation, and technical indicators point to short-term weakness. The share buyback program adds a positive note, reflecting confidence in sustained growth.

Positive Factors

AI Product Traction

NNACV from WDAY's AI products doubled year over year, with strong traction in products like Extend Pro and new Recruiting & Talent Mobility Agents.

Financial Performance

The company's operating margin was strong and exceeded guidance by approximately 200 basis points.

Stock Repurchase

Workday announced a new $1 billion stock repurchase program.

Negative Factors

Growth Concerns

An in-line quarter does little to address investor concerns around growth deceleration and AI disruption risk to pricing.

Market Competition

Despite improvements, fierce competition and challenging macroeconomic conditions present risks.

Revenue Performance

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

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 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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.67B	8.42B	7.20B	6.20B	5.15B	4.30B
Gross Profit	6.55B	6.35B	5.43B	4.48B	3.72B	3.11B
EBITDA	1.07B	1.08B	752.00M	206.76M	376.51M	87.33M
Net Income	487.00M	526.00M	1.38B	-366.75M	29.00M	-282.43M
Balance Sheet
Total Assets	17.21B	17.98B	16.45B	13.49B	10.50B	8.72B
Cash, Cash Equivalents and Short-Term Investments	7.97B	8.02B	7.81B	6.12B	3.64B	3.54B
Total Debt	3.39B	3.36B	3.30B	3.25B	2.10B	2.24B
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: Neutral
• Last Price: 231.85
• 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 Neutral. The current price of 231.85 is above the 20-day moving average (MA) of 228.97, below the 50-day MA of 234.78, and below the 200-day MA of 248.96, indicating a neutral trend. The MACD of -3.34 indicates Negative momentum. The RSI at 52.92 is Neutral, neither overbought nor oversold. The STOCH value of 75.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WDAY.

Workday Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	78 Outperform	$12.57B	29.38	25.76%	0.67%	10.21%	-10.56%
BILL	74 Outperform	$4.17B	482.28	0.97%	―	14.52%	―
WDAY	73 Outperform	$60.37B	124.84	5.70%	―	15.38%	-67.58%
PCTY	70 Outperform	$9.49B	42.81	20.04%	―	13.74%	10.99%
GRAB	64 Neutral	$20.91B	186.55	1.77%	―	18.84%	―
COIN	64 Neutral	$81.59B	30.72	27.96%	―	57.56%	84.56%
Sector *	62 Neutral	£505.62M	27.06	0.85%	2.79%	3.88%	-21.08%

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.

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.