Workday Poised to Report Earnings Amid Market Challenges
Workday, Inc. (WDAY) commands a market cap of $70.3 billion as a cloud-based enterprise software provider. Founded in 2005, the California-based company specializes in financial management, human capital management, and analytics, offering user-friendly solutions for payroll, talent management, accounting, and workforce planning. It integrates AI and machine learning for real-time insights.
The company is set to release its fiscal Q4 earnings results before the market opens on Monday, February 24.
Analysts Predict Strong Earnings Growth
Analysts expect Workday to report a profit of $0.58 per share, which would be a remarkable 176.2% increase from $0.21 in the same quarter last year. The company has beaten Wall Street’s earnings projections in two of the past four quarters while falling short in the other two.
For fiscal 2025, the forecasted earnings per share (EPS) for Workday is $2.63, representing a staggering increase of 911.5% from $0.26 in fiscal 2024.
Market Performance and Trends
Over the past year, WDAY shares have declined by 6.3%, which is a stark contrast to the S&P 500 Index’s ($SPX) increase of 24.1% and the Technology Select Sector SPDR Fund’s (XLK) rise of 15.8% during the same timeframe.
This underperformance can be attributed to a slower-than-expected growth in client headcount and recent market volatility, particularly in the tech sector.
Stock Upgrades and Market Reactions
On January 8, Workday shares gained over 2% following an upgrade from Deutsche Bank Aktiengesellschaft (DB), which moved the stock rating from “Hold” to “Buy” and set a target price of $300.
Moreover, WDAY shares saw a 9.2% jump on December 9 after being included in the S&P 500 Index. However, following the announcement of its fiscal 2025 third-quarter financial results on November 26, shares dropped more than 6% as investors reacted to a weaker-than-expected outlook for subscription revenue.
Analyst Consensus and Future Expectations
Despite recent challenges, the consensus among analysts remains highly positive. The overall rating for Workday stock is a “Strong Buy.” Out of the 34 analysts covering the stock, there are 24 “Strong Buys,” two “Moderate Buys,” and eight “Holds.”
The average analyst price target for WDAY stands at $292.39, indicating a potential upside of 8.1% based on current prices.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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