Strength Seen in Workday (WDAY): Can Its 5.6% Jump Turn into More Strength?

Workday (WDAY) shares ended the last trading session 5.6% higher at $170.15. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 23.4% loss over the past four weeks.

The uptrend was largely buoyed by the introduction of the Military Skills Mapper, a new feature in Workday Recruiting designed to help organizations more effectively identify and hire military veterans. The feature helps to translate a veteran's military background into civilian-equivalent skills to enable employers to better understand the leadership, technical expertise, and operational discipline service members bring to the workforce.

Workday continues to benefit from high demand for its HCM and financial management solutions. The company’s cloud-based business model and expanding product portfolio have been the primary growth drivers. Moreover, the growing clout of Workday Prism Analytics and Adaptive Insights business planning cloud offerings holds promise.

This maker of human resources software is expected to post quarterly earnings of $2.30 per share in its upcoming report, which represents a year-over-year change of +19.8%. Revenues are expected to be $2.52 billion, up 14.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Workday, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on WDAY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Workday is part of the Zacks Internet - Software industry. NCR Atleos (NATL), another stock in the same industry, closed the last trading session 1% higher at $38.44. NATL has returned -0.7% in the past month.

For NCR Atleos, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.32. This represents a change of +18.9% from what the company reported a year ago. NCR Atleos currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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