Workday (WDAY) closed the most recent trading day at $121.18, moving +2.84% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.49%. Elsewhere, the Dow saw a downswing of 0.05%, while the tech-heavy Nasdaq depreciated by 0.9%.
Heading into today, shares of the maker of human resources software had lost 8.5% over the past month, lagging the Computer and Technology sector's gain of 21.92% and the S&P 500's gain of 12.8%.
The investment community will be paying close attention to the earnings performance of Workday in its upcoming release. In that report, analysts expect Workday to post earnings of $2.49 per share. This would mark year-over-year growth of 11.66%. Alongside, our most recent consensus estimate is anticipating revenue of $2.52 billion, indicating a 12.37% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $10.54 per share and revenue of $10.66 billion, indicating changes of +14.19% and +11.56%, respectively, compared to the previous year.
Investors should also take note of any recent adjustments to analyst estimates for Workday. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. Workday presently features a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Workday has a Forward P/E ratio of 11.18 right now. Its industry sports an average Forward P/E of 18.82, so one might conclude that Workday is trading at a discount comparatively.
It is also worth noting that WDAY currently has a PEG ratio of 0.55. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 1.09 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 78, placing it within the top 32% of over 250 industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the 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 Report
This article originally published on Zacks Investment Research (zacks.com).