Short Report on Workday Stock

Now trading at a price of $159.81, Workday has moved -1.9% so far today on a volume of 1,046,645, compared to its average of 2,275,329. In contrast, the S&P 500 index moved 0.4%.

Workday shares moved -36.3% over the last 52 weeks, with a high of $261.89 and a low of $128.72. During this time, the stock lagged the S&P 500 index by -18.9%. As of January 2022, the company's 50-day average price is $158.932. Workday, Inc. provides enterprise cloud applications in the United States and internationally. The large-cap Technology company has 17,522 full time employees and is based in Pleasanton, CA. Workday has not offered any dividends in the last year.

Overview of the Company's a Pattern of Improving Cash Flows with an Upwards Trend:

2019-01-31 2020-01-31 2021-01-31 2022-01-31
Revenue (MM) $2,822 $3,627 $4,318 $5,139
Revenue Growth n/a 28.52% 19.04% 19.01%
Gross Margins 70.4% 70.6% 72.2% 72.2%
Gross Margins Growth n/a 0.28% 2.27% 0.0%
Operating Margins -16.4% -13.8% -5.8% -2.3%
Operating Margins Growth n/a 15.85% 57.97% 60.34%
Earnings Per Share -$1.93 -$2.12 -$1.19 $0.12
EPS Growth n/a -9.84% 43.87% 110.08%
Free Cash Flow (MM) $394 $620 $1,012 $1,378
FCF Growth n/a 57.49% 63.23% 36.19%
Capital Expenditures (MM) -$213 -$245 -$256 -$272
Net Debt / EBITDA -3.42 -4.05 5.77 1.03

Workday Is Overvalued:

Compared to the Technology sector's average of 26.5, Workday has a trailing twelve month price to earnings (P/E) ratio of -1507.6 and, based on its EPS guidance of 4.72, an expected P/E ratio of 33.9.

The firm's price to earnings growth (PEG) is 3.44, which indicates that it is overvalued in terms of its expected rate of earnings growth.

Workday's price to book (P/B) ratio is 7.6 compared to its sector average of 5.57. The company is likely overvalued in terms of its net tangible assets. The company's shares are now trading 2020.0% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * EPS * book value per share) = √(22.5 * 0.12 * 21.047) = $7.54

Workday Is the Subject of Mixed Market Indicators:

36 analysts are following Workday and have set target prices ranging from $142 to $245 per share. On average, they have given the company a rating of buy. At the current price of $159.81, WDAY is trading -20.95% away from its average analyst target price of $202.17 per share, implying an analyst consensus of strong upside potential for the stock.

The company has an average amount of shares sold short since 2.0% of the company's shares are tied to short positions. Institutions own 90.3% of Workday's shares, while the insider ownership rate stands at 1.17%. The biggest shareholder is the Vanguard Group, Inc. with a 8% stake in the company worth approximately $2,047,601,027.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.