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

WORKDAY INC-CLASS A (NASDAQ:WDAY) was identified by our stock screener as an affordable growth candidate. The company, which provides enterprise cloud applications for finance and human resources, shows solid growth potential while maintaining reasonable valuation metrics. Its financial health and profitability also 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 EPS growth of 14.37% and revenue growth of 12.73% annually in the coming years.

Valuation Assessment

• P/E Ratio: At 29.64, WDAY’s P/E ratio is lower than 70.92% of its software industry peers.
• Forward P/E: The forward P/E of 22.31 suggests a more attractive valuation compared to the S&P 500 average of 36.52.
• Price-to-Free Cash Flow: The company trades at a discount to 75.89% of its industry peers based on this metric.

Financial Health & Profitability

• Strong Balance Sheet: WDAY has a solid Altman-Z score of 5.35, indicating low bankruptcy risk.
• Liquidity: Current and quick ratios of 2.07 demonstrate good short-term financial stability.
• Profit Margins: Operating margin (7.27%) and profit margin (5.60%) outperform over 70% of industry competitors.

While WDAY does not pay dividends, its growth trajectory and reasonable valuation make it a compelling candidate for investors focused on long-term appreciation.

For a deeper look, review the full fundamental analysis of WDAY.

Our Affordable Growth screener lists more stocks with strong growth and reasonable valuations, updated daily.

Disclaimer

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