Workday, Inc. ($WDAY) Earnings (Q2 FY23)

 Workday, Inc. ($WDAY) Earnings and Opinion:


Workday is a company in the Technology sector and operates in the Software-Application industry. The company provides enterprise cloud applications in the United States and internationally. Workday was incorporated in 2005 and is currently headquartered in Pleasanton, California. The company made its debut on the stock market in 2012.

Workday Earnings Results:

  • Revenues of $1.54B beating expectations of $1.52B
  • Operating Income of $302M beating expectations of $268M
  • Adjusted EPS $0.83 beating expectations of $0.80
  • Guidance all beat estimates for Q3 FY 23 and FY23
Opinion:
Workday is currently moving higher after reporting earnings after the market closed this afternoon. The subscription revenue guidance was reaffirmed and they increased the outlook on operating margin. Workday produced a solid earnings report, with beats on all metrics. Operating margin is something that sticks out, which beat by 204 bps. Overall, investors have to be pleased with the performance with the company half way through the fiscal year. The guidance looks solid for the latter half of the year as well. Let's dive into valuation, the P/E ratio is at 2,714.7 which is way above average. However, this is okay because they are just becoming profitable. The P/S ratio is also high at 9.62, which is also above industry average. Annual growth looks to be steady at around 20%. The current ratio is at 1.56, which is at a comfortable position. Cash outweighs debt, which is also a good position for the company. In my opinion, I think this stock has a lot of potential, even thought it is way overvalued. The ratios should be ignored, especially because the stock is on the verge of profitability. The growth is steady and the outlook is in a good place. The risk is definitely high with this stock, but the upside will pay off if the company performs to expectations. I am long Workday.


*Information from Yahoo Finance, Consensus Gurus, CMLVIZ, Motley Fool

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