Workday (WDAY) closed the most recent trading day at $188.18, moving +2.6% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.55%. Meanwhile, the Dow gained 0.63%, and the Nasdaq, a tech-heavy index, added 0.91%.
Heading into today, shares of the maker of human resources software had lost 15.42% over the past month, lagging the Computer and Technology sector's gain of 0.04% and the S&P 500's gain of 0.71%.
The upcoming earnings release of Workday will be of great interest to investors. The company is expected to report EPS of $2.3, up 19.79% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.52 billion, up 14.11% from the prior-year quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $9.07 per share and a revenue of $9.54 billion, representing changes of +24.25% and +12.99%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Workday. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Workday currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Workday has a Forward P/E ratio of 20.23 right now. This signifies a discount in comparison to the average Forward P/E of 23.12 for its industry.
It's also important to note that WDAY currently trades at a PEG ratio of 0.93. 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 Internet - Software industry currently had an average PEG ratio of 1.39 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 73, positioning it in the top 30% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next 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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