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Workday (WDAY) closed at $246.03 in the latest trading session, marking a +0.01% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.12%. Meanwhile, the Dow gained 0.52%, and the Nasdaq, a tech-heavy index, lost 0.23%.
The maker of human resources software's stock has dropped by 11.62% in the past month, falling short of the Computer and Technology sector's loss of 3.73% and the S&P 500's loss of 3.45%.
The upcoming earnings release of Workday will be of great interest to investors. The company is expected to report EPS of $1.75, up 11.46% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $2.18 billion, reflecting a 13.42% rise from the equivalent quarter last year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $7.14 per share and a revenue of $8.41 billion, signifying shifts of +22.26% and +15.87%, respectively, from the last year.
Any recent changes to analyst estimates for Workday should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 2.03% rise in the Zacks Consensus EPS estimate. At present, Workday boasts a Zacks Rank of #2 (Buy).
In the context of valuation, Workday is at present trading with a Forward P/E ratio of 34.47. This represents a premium compared to its industry's average Forward P/E of 27.61.
It's also important to note that WDAY currently trades at a PEG ratio of 1.64. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 2.05.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 34, putting it in the top 14% of all 250+ industries.