Workday, Inc. (WDAY): A Bull Case Theory

We came across a bullish thesis on Workday, Inc. on X.com by @TheValueist. In this article, we will summarize the bulls’ thesis on WDAY. Workday, Inc.'s share was trading at $199.55 as of January 13th. WDAY’s trailing and forward P/E were 84.20 and 18.32 respectively according to Yahoo Finance.

Workday, Inc. (WDAY) is a leading cloud-native enterprise applications provider specializing in human capital management (HCM) and financial management, with an expanding platform that increasingly targets AI-driven workflow automation, analytics, and agentic execution. The company is transitioning from a “system of record” to a “system of action,” leveraging a unified HR and finance data model, embedded process orchestration, and compliance controls to create a defensible position for enterprise AI adoption.

This strategic evolution supports upsell opportunities, platform attach, and usage-based monetization, allowing Workday to expand revenue per seat while maintaining strong subscription economics. Its recurring revenue base, high retention rates (~97% gross retention), and operating leverage underpin durable cash flow growth, while new modules and AI offerings reduce exposure to seat-count fluctuations and labor market volatility. Workday is executing on three major growth vectors: suite expansion with broader finance and frontline workforce capabilities, mid-market penetration through Workday GO, and geographic expansion in Europe and India, reinforced by sovereign cloud investments and AI centers of excellence.

Strategic AI acquisitions—Sana, Paradox, and Pipedream—enhance Workday’s ability to deliver agentic enterprise workflows, unify user experiences, and monetize consumption through Flex Credits, positioning the company to capture incremental value across HR, finance, and adjacent domains. Management incentives are heavily equity-aligned, capital allocation includes meaningful share repurchases, and top leadership brings domain-fit experience from VMware, SAP, and Google Cloud, supporting execution and scale.

While risks include leadership transitions, execution cadence without a COO, and competitive pressure from Oracle, SAP, and hyperscaler ecosystems, the combination of durable subscription growth, AI optionality, and platform expansion supports a bullish thesis. Workday’s stock offers compelling upside if AI adoption accelerates net expansion, drives pricing power, and converts regulatory and international investments into measurable bookings, positioning the company as a durable compounder with long-term upside potential.

Previously, we covered a bullish thesis on Workday, Inc. (WDAY) by TechFundies in October 2024, which highlighted HCM and FINS growth, international expansion, and disciplined guidance supporting ~20% free cash flow growth. WDAY’s stock price has depreciated by approximately 18.37% since our coverage due to FINS deceleration and market volatility. @TheValueist shares a similar thesis but emphasizes AI-driven platform expansion and usage-based monetization.

Workday, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held WDAY at the end of the third quarter which was 76 in the previous quarter. While we acknowledge the potential of WDAY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.