WORKDAY INC-CLASS A (WDAY) Stock Fundamental Analysis
NASDAQ:WDAY - Nasdaq - US98138H1014 - Common Stock
Taking everything into account, WDAY scores 6 out of 10 in our fundamental rating. WDAY was compared to 285 industry peers in the Software industry. While WDAY has a great health rating, its profitability is only average at the moment. WDAY is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings could make WDAY a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
In the past year WDAY was profitable.
In the past year WDAY had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: WDAY reported negative net income in multiple years.
In the past 5 years WDAY always reported a positive cash flow from operatings.
1.2 Ratios
WDAY has a better Return On Assets (9.87%) than 86.02% of its industry peers.
With an excellent Return On Equity value of 18.79%, WDAY belongs to the best of the industry, outperforming 86.38% of the companies in the same industry.
The Return On Invested Capital of WDAY (2.76%) is better than 70.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.87% | ||
| ROE | 18.79% | ||
| ROIC | 2.76% |
ROA(3y)1.99%
ROA(5y)-0.87%
ROE(3y)3.72%
ROE(5y)-3.35%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
WDAY's Profit Margin of 19.87% is amongst the best of the industry. WDAY outperforms 86.74% of its industry peers.
WDAY's Operating Margin of 5.13% is fine compared to the rest of the industry. WDAY outperforms 71.68% of its industry peers.
WDAY's Gross Margin of 75.60% is fine compared to the rest of the industry. WDAY outperforms 68.46% of its industry peers.
WDAY's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.13% | ||
| PM (TTM) | 19.87% | ||
| GM | 75.6% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.52%
GM growth 5Y1.43%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WDAY is destroying value.
WDAY has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, WDAY has more shares outstanding
WDAY has a better debt/assets ratio than last year.
2.2 Solvency
WDAY has an Altman-Z score of 5.92. This indicates that WDAY is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.92, WDAY is doing good in the industry, outperforming 68.46% of the companies in the same industry.
WDAY has a debt to FCF ratio of 1.41. This is a very positive value and a sign of high solvency as it would only need 1.41 years to pay back of all of its debts.
WDAY's Debt to FCF ratio of 1.41 is fine compared to the rest of the industry. WDAY outperforms 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.
Looking at the Debt to Equity ratio, with a value of 0.35, WDAY is doing worse than 63.44% of the companies in the same industry.
Although WDAY does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.41 | ||
| Altman-Z | 5.92 |
ROIC/WACC0.25
WACC11.06%
2.3 Liquidity
A Current Ratio of 2.05 indicates that WDAY has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.05, WDAY is in the better half of the industry, outperforming 60.93% of the companies in the same industry.
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.
WDAY has a better Quick ratio (2.05) than 62.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.05 | ||
| Quick Ratio | 2.05 |
3. Growth
3.1 Past
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.
WDAY shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 33.84% yearly.
Looking at the last year, WDAY shows a quite strong growth in Revenue. The Revenue has grown by 16.81% in the last year.
WDAY shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 20.80% yearly.
EPS 1Y (TTM)32.13%
EPS 3Y26.72%
EPS 5Y33.84%
EPS Q2Q%23.53%
Revenue 1Y (TTM)16.81%
Revenue growth 3Y18.9%
Revenue growth 5Y20.8%
Sales Q2Q%15.78%
3.2 Future
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.
EPS Next Y24.93%
EPS Next 2Y20.98%
EPS Next 3Y20.86%
EPS Next 5Y16.57%
Revenue Next Year16.06%
Revenue Next 2Y14.59%
Revenue Next 3Y14.32%
Revenue Next 5Y14.41%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 36.07, the valuation of WDAY can be described as expensive.
WDAY's Price/Earnings ratio is a bit cheaper when compared to the industry. WDAY is cheaper than 68.46% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. WDAY is valued slightly more expensive when compared to this.
Based on the Price/Forward Earnings ratio of 29.33, the valuation of WDAY can be described as expensive.
69.18% of the companies in the same industry are more expensive than WDAY, based on the Price/Forward Earnings ratio.
WDAY is valuated rather expensively when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.07 | ||
| Fwd PE | 29.33 |
4.2 Price Multiples
61.65% of the companies in the same industry are more expensive than WDAY, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, WDAY is valued a bit cheaper than the industry average as 75.63% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.59 | ||
| EV/EBITDA | 77.75 |
4.3 Compensation for Growth
WDAY's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of WDAY may justify a higher PE ratio.
A more expensive valuation may be justified as WDAY's earnings are expected to grow with 20.86% in the coming years.
PEG (NY)1.45
PEG (5Y)1.07
EPS Next 2Y20.98%
EPS Next 3Y20.86%
5. Dividend
5.1 Amount
WDAY does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
WORKDAY INC-CLASS A
NASDAQ:WDAY (1/21/2025, 8:00:02 PM)
After market: 250.4 -0.32 (-0.13%)250.72
+1.08 (+0.43%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.1%
Inst Owner Change-0.03%
Ins Owners0.63%
Ins Owner Change2.21%
Market Cap66.69B
Analysts77.78
Price Target297.92 (18.83%)
Short Float %4.98%
Short Ratio2.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.76%
Min EPS beat(2)4.1%
Max EPS beat(2)5.42%
EPS beat(4)4
Avg EPS beat(4)5.52%
Min EPS beat(4)4.1%
Max EPS beat(4)7.83%
EPS beat(8)8
Avg EPS beat(8)7.69%
EPS beat(12)11
Avg EPS beat(12)6.84%
EPS beat(16)15
Avg EPS beat(16)13.01%
Revenue beat(2)0
Avg Revenue beat(2)-0.96%
Min Revenue beat(2)-1.33%
Max Revenue beat(2)-0.6%
Revenue beat(4)0
Avg Revenue beat(4)-1.2%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)-0.6%
Revenue beat(8)0
Avg Revenue beat(8)-1.14%
Revenue beat(12)0
Avg Revenue beat(12)-1.07%
Revenue beat(16)0
Avg Revenue beat(16)-0.95%
PT rev (1m)0.82%
PT rev (3m)0.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.06%
EPS NY rev (1m)0%
EPS NY rev (3m)2.01%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.07 | ||
| Fwd PE | 29.33 | ||
| P/S | 8.18 | ||
| P/FCF | 31.59 | ||
| P/OCF | 28.44 | ||
| P/B | 7.73 | ||
| P/tB | 14.08 | ||
| EV/EBITDA | 77.75 |
EPS(TTM)6.95
EY2.77%
EPS(NY)8.55
Fwd EY3.41%
FCF(TTM)7.94
FCFY3.17%
OCF(TTM)8.81
OCFY3.52%
SpS30.67
BVpS32.42
TBVpS17.8
PEG (NY)1.45
PEG (5Y)1.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.87% | ||
| ROE | 18.79% | ||
| ROCE | 3.49% | ||
| ROIC | 2.76% | ||
| ROICexc | 6.83% | ||
| ROICexgc | 34.56% | ||
| OM | 5.13% | ||
| PM (TTM) | 19.87% | ||
| GM | 75.6% | ||
| FCFM | 25.88% |
ROA(3y)1.99%
ROA(5y)-0.87%
ROE(3y)3.72%
ROE(5y)-3.35%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.52%
GM growth 5Y1.43%
F-Score7
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.41 | ||
| Debt/EBITDA | 4.11 | ||
| Cap/Depr | 76.22% | ||
| Cap/Sales | 2.86% | ||
| Interest Coverage | 3.82 | ||
| Cash Conversion | 323.3% | ||
| Profit Quality | 130.27% | ||
| Current Ratio | 2.05 | ||
| Quick Ratio | 2.05 | ||
| Altman-Z | 5.92 |
F-Score7
WACC11.06%
ROIC/WACC0.25
Cap/Depr(3y)104.99%
Cap/Depr(5y)105.76%
Cap/Sales(3y)5.94%
Cap/Sales(5y)6.68%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)32.13%
EPS 3Y26.72%
EPS 5Y33.84%
EPS Q2Q%23.53%
EPS Next Y24.93%
EPS Next 2Y20.98%
EPS Next 3Y20.86%
EPS Next 5Y16.57%
Revenue 1Y (TTM)16.81%
Revenue growth 3Y18.9%
Revenue growth 5Y20.8%
Sales Q2Q%15.78%
Revenue Next Year16.06%
Revenue Next 2Y14.59%
Revenue Next 3Y14.32%
Revenue Next 5Y14.41%
EBIT growth 1Y2626.72%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year40.12%
EBIT Next 3Y27.25%
EBIT Next 5Y23.03%
FCF growth 1Y74.58%
FCF growth 3Y23.76%
FCF growth 5Y55.08%
OCF growth 1Y48.6%
OCF growth 3Y19.21%
OCF growth 5Y28.78%