Workday (NYSE:WDAY)

CAPS Rating: 3 out of 5

WDAY News and Commentary

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All Players

190 Outperform
55 Underperform
 

All-Star Players

51 Outperform
12 Underperform
 

Wall Street

8 Outperform
2 Underperform
 

Top WDAY Bull/Bear Pitches

The best Bull and Bear pitches based on recency and number of recommendations.

karlsmq (< 20)
Submitted November 20, 2013

MAKING ENTERPRISE TASKS EASY

murphydevani (26.40)
Submitted August 27, 2015

Target $69 - $66

WDAY VS S&P 500 (SPY)

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Recent Community Commentary

Read the most recent pitches from players about WDAY.

Recs

0
Member Avatar optioncoach (96.78) Submitted: 8/24/2017 10:25:22 PM : Outperform Start Price: $105.40 WDAY Score: -3.61

Keeps moving up in a down market. Earnings are completed nv and shouldn't disappoint.

Recs

0
Member Avatar asdfk123 (71.10) Submitted: 7/24/2017 11:14:22 PM : Outperform Start Price: $102.75 WDAY Score: -0.21

Workday is a native software-as-a-service enterprise resource planning company. Workday also offers professional services as part of on boarding new customers to their software.

Even though Workday is not profitable, we see top line revenue growing fast, and the gap narrowing on bottom line losses. Workday has also been narrowing the price to sales ratio from 43.89 in 2011 to 8.88 today. We also find it promising the stock price has been growing significantly slower than top-line revenue.

Workday is not profitable by GAAP measures, but it is important to note the firm has been producing positive free cash flow since January 2016 fiscal year end. Workday provides non-GAAP operating expenses, which exclude share-based compensation expenses in its annual report. This provides a more accurate picture of the prospects for the firm, and we have taken this into consideration during our discounted cash flow forecast.

When comparing Workday against another major cloud player (Salesforce), we are impressed with how close Workday comes in terms of cost of sales. Workday also spends significantly less as a percentage of sales on selling/general/admin expenses. When considering the age of Salesforce, we believe Workday benchmarks favorably.

Overall, we see Workday firm risk as low. The two largest risks we’ve identified are IT System Interruption and the Market for Cloud Computing. Our largest concern is the market for cloud computing. If the market for cloud computing erodes, we would probably sell our shares. Workdays native software-as-a-service cloud computing delivery model is dependent on the continued adoption of cloud technology in the enterprise. A reduction in adoption will materially adversely impact the firm.

When comparing the competitive forces that shape strategy, we see Workday needing to compete with slightly less intensity and basis versus broadly established industry players such as Oracle and SAP. This is due to the fact the cloud computing delivery model is growing much faster than the traditional on-premise installation model. Even though Oracle and SAP offer alternatives, their core systems were originally developed for on premise installations, which forces them to compete with more intensity due to accumulated technology debt built into their ecosystems. When comparing Workday against the industry, we see the firm as having lower negotiating leverage with customers. We see incumbents with significantly more negotiating leverage due to the high switching costs associated with enterprise resource planning software.

After performing a discounted cash flow analysis on Workday, we find the firms present value of company operations at $21.3 billion. With approximately 204 million shares outstanding, this places Workday fair value at or around $104.54 based on its prevent value of future operations. Our analysis has a lot of uncertainty due to the lack of historical operating results for Workday. We assume top line growth of 18%-20% through 2027 with the firm achieving positive GAAP EBIT by 2022.

Even though Workday is not cheap, we believe the firm is priced fairly given its prospects for the future. Workday will be an exciting company to watch over the next 5-10 years.

Recs

0
Member Avatar TMFEBCapital (44.60) Submitted: 6/9/2017 2:00:46 PM : Outperform Start Price: $97.93 WDAY Score: +3.53

Speaking of do-overs, how about your chance to buy Peoplesoft again. Yes, it got acquired long ago by Oracle, but its founders are back in business again at Workday, and its human resource solutions are catching on with businesses. Sales are growing (expectations for 33% top-line growth in FY2018) and while this company isn't cheap, this type of stock rarely is. Given it's on sale today, I'm less worried if it drops another 5-10%, and more hopeful it gives me market beating returns over the next 3 years!

Leaderboard

Find the members with the highest scoring picks in WDAY.

Score Leader

ronmcpeek

ronmcpeek (27.56) Score: +152.10

The Score Leader is the player with the highest score across all their picks in WDAY.

Top
Pick
Member Name Member
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
Index
Gain
Score Commentary
sa3roman 20.57 2/9/2016 Outperform 5Y $48.36 +119.77% +39.50% +80.27 0 Comment
acabral 54.65 12/22/2016 Outperform 3Y $66.81 +59.08% +13.57% +45.50 0 Comment
brandstudere 79.84 12/15/2016 Outperform 5Y $68.92 +54.21% +13.10% +41.11 0 Comment
goodwitchellen 40.24 12/15/2016 Outperform 5Y $69.40 +53.14% +12.76% +40.38 0 Comment
griderX 97.90 2/28/2014 Underperform 3Y $109.99 -3.37% +36.80% +40.17 0 Comment
sgirardin < 20 12/2/2016 Outperform 5Y $68.11 +56.04% +16.51% +39.53 0 Comment
Windsurfing1 74.00 11/12/2012 Outperform 5Y $47.47 +123.89% +84.56% +39.33 1 Comment
TMFHumbleServant 91.72 1/18/2013 Outperform 5Y $50.74 +109.46% +72.86% +36.60 1 Comment
Pr0metheus 40.29 12/3/2012 Outperform 5Y $50.10 +112.14% +79.12% +33.02 0 Comment
OleSmoky 50.42 1/9/2017 Outperform 5Y $73.90 +43.82% +12.72% +31.09 1 Comment

Wall Street

See what the Wall Street professionals think, according to their public statements and filings.

Player Name Player
Rating
Start
Date
Call Time
Frame
Start
Price
Stock
Gain
S&P
Gain
Score End Date Commentary
tracknorthlandca < 20 10/13/2014 Outperform NS $79.64 +33.45% +34.30% -0.85 0 Comment
TrackCanaccord 51.79 8/28/2014 Outperform NS $87.25 +21.81% +28.15% -6.34 0 Comment
TrackFBRCapitalM 90.09 2/28/2014 Outperform NS $115.93 -8.32% +37.67% -46.00 0 Comment
TrackUBS 93.56 1/7/2014 Outperform NS $86.64 +22.67% +39.70% -17.03 0 Comment
TrackOppenheimer 68.04 5/10/2013 Outperform NS $65.66 +61.86% +56.93% +4.93 0 Comment
TrackJimCramer 84.96 5/1/2013 Outperform 3W $61.62 +72.48% +61.60% +10.88 0 Comment
TrackBMOCapital < 20 4/25/2013 Outperform NS $58.94 +80.32% +61.54% +18.78 0 Comment
TrackWedbush 86.96 4/17/2013 Outperform NS $60.00 +77.13% +63.66% +13.48 0 Comment
TrackUltraLong 20.11 10/25/2012 Underperform NS $53.33 +99.29% +80.10% -19.19 1 Comment
TrackPoisedTo < 20 10/15/2012 Underperform 5Y $52.44 +102.67% +78.09% -24.58 0 Comment

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