Is NASDAQ:WDAY on the Verge of a Major Breakout as a Strong Growth Stock?

Growth investors are on the lookout for stocks displaying robust revenue and EPS growth. In this analysis, we'll assess whether WORKDAY INC-CLASS A (NASDAQ:WDAY) aligns with growth investing criteria, especially as it consolidates and signals a possible breakout. As always, investors should conduct their own research, but WORKDAY INC-CLASS A has surfaced on our radar for growth with base formation, warranting further examination.

How do we evaluate the Growth for NASDAQ:WDAY?

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:WDAY was assigned a score of 8 for growth:

• WDAY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 53.35%, which is quite impressive.
• Measured over the past years, WDAY shows a very strong growth in Earnings Per Share. The EPS has been growing by 28.23% on average per year.
• WDAY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.45%.
• WDAY shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.73% yearly.
• The Earnings Per Share is expected to grow by 30.21% on average over the next years. This is a very strong growth
• WDAY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 17.65% yearly.

Assessing Health for NASDAQ:WDAY

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:WDAY has earned a 7 out of 10:

• WDAY has an Altman-Z score of 7.21. This indicates that WDAY is financially healthy and has little risk of bankruptcy at the moment.
• WDAY has a Altman-Z score of 7.21. This is in the better half of the industry: WDAY outperforms 78.18% of its industry peers.
• WDAY has a debt to FCF ratio of 1.89. This is a very positive value and a sign of high solvency as it would only need 1.89 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 1.89, WDAY is in the better half of the industry, outperforming 74.18% of the companies in the same industry.
• WDAY has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
• Even though the debt/equity ratio score it not favorable for WDAY, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• A Current Ratio of 2.13 indicates that WDAY has no problem at all paying its short term obligations.
• WDAY's Current ratio of 2.13 is fine compared to the rest of the industry. WDAY outperforms 63.64% of its industry peers.
• A Quick Ratio of 2.13 indicates that WDAY has no problem at all paying its short term obligations.
• The Quick ratio of WDAY (2.13) is better than 64.00% of its industry peers.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:WDAY, the assigned 5 is noteworthy for profitability:

• WDAY's Return On Assets of 0.48% is fine compared to the rest of the industry. WDAY outperforms 72.00% of its industry peers.
• The Return On Equity of WDAY (1.01%) is better than 74.55% of its industry peers.
• WDAY has a better Return On Invested Capital (0.12%) than 67.64% of its industry peers.
• Looking at the Profit Margin, with a value of 0.96%, WDAY is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
• With a decent Operating Margin value of 0.22%, WDAY is doing good in the industry, outperforming 68.36% of the companies in the same industry.
• Looking at the Gross Margin, with a value of 74.74%, WDAY is in the better half of the industry, outperforming 68.73% of the companies in the same industry.

Why is NASDAQ:WDAY a setup?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:WDAY has a 9 as its setup rating:

WDAY has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 305.89. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 303.00, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

More Strong Growth stocks can be found in our Strong Growth screener.

Check the latest full fundamental report of WDAY for a complete fundamental analysis.

For an up to date full technical analysis you can check the technical report of WDAY

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.