In the world of growth stocks, NASDAQ:WDAY shines as a value proposition.

Last update: Jan 30, 2025

Our stock screener has spotted WORKDAY INC-CLASS A (NASDAQ:WDAY) as a growth stock which is not overvalued. NASDAQ:WDAY is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Growth Assessment of NASDAQ:WDAY

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:WDAY has earned a 8 for growth:

WDAY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 32.13%, which is quite impressive.
The Earnings Per Share has been growing by 33.84% on average over the past years. This is a very strong growth
WDAY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.81%.
The Revenue has been growing by 20.80% on average over the past years. This is a very strong growth!
The Earnings Per Share is expected to grow by 16.57% on average over the next years. This is quite good.
Based on estimates for the next years, WDAY will show a quite strong growth in Revenue. The Revenue will grow by 14.41% on average per year.

Understanding NASDAQ:WDAY's Valuation Score

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:WDAY has received a 5 out of 10:

67.03% of the companies in the same industry are more expensive than WDAY, based on the Price/Earnings ratio.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WDAY indicates a somewhat cheap valuation: WDAY is cheaper than 69.53% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 91.29. WDAY is valued rather cheaply when compared to this.
Based on the Enterprise Value to EBITDA ratio, WDAY is valued a bit cheaper than 60.93% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WDAY indicates a somewhat cheap valuation: WDAY is cheaper than 74.55% of the companies listed in the same industry.
The decent profitability rating of WDAY may justify a higher PE ratio.
WDAY's earnings are expected to grow with 20.86% in the coming years. This may justify a more expensive valuation.

Looking at the Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:WDAY, the assigned 7 reflects its health status:

WDAY has an Altman-Z score of 6.24. This indicates that WDAY is financially healthy and has little risk of bankruptcy at the moment.
WDAY has a better Altman-Z score (6.24) than 68.82% of its industry peers.
The Debt to FCF ratio of WDAY is 1.41, which is an excellent value as it means it would take WDAY, only 1.41 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of WDAY (1.41) is better than 69.18% of its industry peers.
WDAY has a Debt/Equity ratio of 0.35. 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 2.05 indicates that WDAY has no problem at all paying its short term obligations.
WDAY has a better Current ratio (2.05) than 60.93% of its industry peers.
WDAY has a Quick Ratio of 2.05. This indicates that WDAY is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of WDAY (2.05) is better than 62.01% of its industry peers.

Exploring NASDAQ:WDAY's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:WDAY scores a 6 out of 10:

With an excellent Return On Assets value of 9.87%, WDAY belongs to the best of the industry, outperforming 86.38% of the companies in the same industry.
WDAY has a better Return On Equity (18.79%) than 87.10% of its industry peers.
WDAY's Return On Invested Capital of 2.76% is fine compared to the rest of the industry. WDAY outperforms 70.25% of its industry peers.
WDAY has a better Profit Margin (19.87%) than 87.10% of its industry peers.
WDAY has a better Operating Margin (5.13%) than 71.68% of its industry peers.
WDAY has a better Gross Margin (75.60%) than 68.46% of its industry peers.

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

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

Keep in mind

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.