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Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long term Workday, Inc. (NASDAQ:WDAY) shareholders have enjoyed a 83% share price rise over the last half decade, well in excess of the market return of around 64% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 45% in the last year.
Since it's been a strong week for Workday shareholders, let's have a look at trend of the longer term fundamentals.
View our latest analysis for Workday
Workday isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last 5 years Workday saw its revenue grow at 19% per year. Even measured against other revenue-focussed companies, that's a good result. While the compound gain of 13% per year is good, it's not unreasonable given the strong revenue growth. If you think there could be more growth to come, now might be the time to take a close look at Workday. Of course, you'll have to research the business more fully to figure out if this is an attractive opportunity.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Workday is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.
A Different Perspective
It's good to see that Workday has rewarded shareholders with a total shareholder return of 45% in the last twelve months. That gain is better than the annual TSR over five years, which is 13%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Workday better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Workday , and understanding them should be part of your investment process.