Morningstar

Workday Inc Class A WDAY

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Stock XNAS Rating as of
$237.15 −3.51 (1.46%)
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Workday: Taking Advantage of a $160 Billion TAM Is Well in the Works; Maintaining $270 Fair Value

Julie Bhusal Sharma

Wide-moat Workday’s financial analyst day continued to emphasize its top long-term growth opportunities, from artificial intelligence to the medium enterprise market, implying roughly similar targets as given last year, all within a $160 billion total addressable market. We reiterate our $270 fair value estimate for Workday as we see worthwhile capital allocation that will allow the firm to extract considerable value from its strong switching costs. We believe shares are fairly valued.

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Price vs Fair Value

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WDAY is trading at a 656% premium.
Price
$237.15
Fair Value
$348.00
Uncertainty
High
1-Star Price
$374.10
5-Star Price
$775.00
Economic Moat
Shytm
Capital Allocation
Tcysqfjwz

Bulls Say, Bears Say

Bulls

Workday’s planning and analytics solutions should take off after covid-19 has enterprises placing more importance on top-down planning. This should drive further customer and ACV growth, and thus revenue growth.

Bears

Workday’s FINS platform may not be able to increase its attach rate, moderating forecast ACV and thus revenue.

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News

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Trading Information

Previous Close Price
$240.66
Day Range
$233.33–240.60
52-Week Range
$199.81–311.28
Bid/Ask
$237.50 / $247.90
Market Cap
$62.84 Bil
Volume/Avg
2.2 Mil / 2.1 Mil

Key Statistics

Price/Earnings (Normalized)
35.99
Price/Sales
8.09
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
1.15%

Company Profile

Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known for being a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 18,000 employees.
Sector
Technology
Industry
Software - Application
Stock Style Box
Large Growth
Total Number of Employees
18,800
Website
https://www.workday.com

Competitors

Valuation

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Metric
WDAY
ORCL
CRM
Price/Earnings (Normalized)
 35.9929.0729.64
Price/Book Value
 7.5642.974.65
Price/Sales
 8.098.827.51
Price/Cash Flow
 25.6923.6019.17
Price/Earnings
WDAY
ORCL
CRM

Financial Strength

Metric
WDAY
ORCL
CRM
Quick Ratio
 1.920.590.86
Current Ratio
 2.040.721.04
Interest Coverage
 2.854.474.66
Quick Ratio
WDAY
ORCL
CRM

Profitability

Metric
WDAY
ORCL
CRM
Return on Assets (Normalized)
 17.72%11.77%9.78%
Return on Equity (Normalized)
 36.06%259.97%15.73%
Return on Invested Capital (Normalized)
 23.31%20.14%15.15%
Return on Assets
WDAY
ORCL
CRM

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