WORKDAY INC-CLASS A (NASDAQ:WDAY) - A Strong Growth Stock with Reasonable Valuation

WORKDAY INC-CLASS A (NASDAQ:WDAY) was identified as an affordable growth stock by our stock screener. The company, which provides enterprise cloud applications for finance and human resources, shows strong growth potential while maintaining reasonable valuation metrics. Its financial health and profitability further support its appeal for investors seeking growth at a sensible price.

Growth Prospects

• Revenue Growth: WDAY has increased revenue by 14.95% over the past year, with an average annual growth rate of 18.42% in recent years.
• Earnings Expansion: Earnings per share (EPS) grew by 24.24% in the last year, with a five-year annualized growth rate of 30.89%.
• Future Expectations: Analysts project continued EPS growth of 14.37% annually, alongside a 12.94% yearly increase in revenue.

Valuation Assessment

• P/E Ratio: At 30.37, WDAY’s P/E ratio is higher than the S&P 500 average but cheaper than 69% of its software industry peers.
• Forward P/E: The forward P/E of 22.85 suggests a more reasonable valuation compared to industry averages.
• Enterprise Value/EBITDA: The ratio indicates WDAY is priced more attractively than 63% of competitors.

Financial Health & Profitability

• Strong Liquidity: A current ratio of 2.07 and quick ratio of 2.07 demonstrate solid short-term financial stability.
• Low Debt Risk: A debt-to-equity ratio of 0.33 and manageable debt-to-FCF ratio (1.29) reflect a healthy balance sheet.
• Profitability Metrics: While net income has been inconsistent in past years, margins are improving, with a 5.60% profit margin outperforming 72% of peers.

For a deeper look at WDAY’s fundamentals, review the full report here.

Our Affordable Growth screener lists more stocks with similar characteristics and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.