Workday (WDAY) closed at $229.30 in the latest trading session, marking a -4.53% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.28%. On the other hand, the Dow registered a gain of 0.43%, and the technology-centric Nasdaq increased by 0.09%.
Prior to today's trading, shares of the maker of human resources software had lost 4.45% lagged the Computer and Technology sector's gain of 6.2% and the S&P 500's gain of 4.37%.
Market participants will be closely following the financial results of Workday in its upcoming release. The company's upcoming EPS is projected at $2.09, signifying a 19.43% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $2.34 billion, showing a 12.22% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.71 per share and a revenue of $9.5 billion, signifying shifts of +19.32% and +12.46%, respectively, from the last year.
Investors should also take note of any recent adjustments to analyst estimates for Workday. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.45% increase. Workday is currently a Zacks Rank #3 (Hold).
In the context of valuation, Workday is at present trading with a Forward P/E ratio of 27.59. This denotes a discount relative to the industry average Forward P/E of 29.03.
Also, we should mention that WDAY has a PEG ratio of 1.46. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Internet - Software industry stood at 2.24 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 62, which puts it in the top 26% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Workday, Inc. (WDAY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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