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Finance and HR Software Stocks Q3 Teardown: Workday (NASDAQ:WDAY) Vs The Rest


Radek Strnad /
2023/01/05 2:21 am EST
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The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Workday (NASDAQ:WDAY) and the rest of the finance and HR software stocks fared in Q3.

Organizations are constantly looking to improve organizational efficiencies, whether it is financial planning, tax management or payroll. Finance and HR software benefit from the SaaS-ification of businesses, large and small, who much prefer the flexibility of cloud-based, web-browser delivered software paid for on a subscription basis than the hassle and expense of purchasing and managing on-premise enterprise software.

The 15 finance and HR software stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 3.13%, while on average next quarter revenue guidance was 1.54% above consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows, but finance and HR software stocks held their ground better than others, with the share prices up 10.3% since the previous earnings results, on average.

Slowest Q3: Workday (NASDAQ:WDAY)

Founded by industry veterans Aneel Bushri and Dave Duffield after their former company PeopleSoft was acquired by Oracle in a hostile takeover, Workday (NASDAQ:WDAY) provides cloud-based software for organizations to manage and plan finance and human resources.

Workday reported revenues of $1.59 billion, up 16.2% year on year, beating analyst expectations. It was a decent quarter for the company, with revenue beating analyst expectations.

"We delivered another solid quarter, demonstrating how our cloud finance and HR solutions are vital for global organizations navigating today's changing world," said Aneel Bhusri, co-founder, co-CEO, and chairman, Workday.

Workday Total Revenue

Workday delivered the weakest performance against analyst estimates of the whole group. The stock is up 19.1% since the results and currently trades at $170.87.

Read our full report on Workday here, it's free.

Best Q3: Flywire (NASDAQ:FLYW)

Originally created to process international tuition payments for universities, Flywire (NASDAQ:FLYW) is a cross border payments processor and software platform focusing on complex, high-value transactions like education, healthcare and B2B payments.

Flywire reported revenues of $95.2 million, up 40.4% year on year, beating analyst expectations by 8.39%. It was a stunning quarter for the company, with a significant improvement in gross margin and very optimistic guidance for the next quarter.

Flywire Total Revenue

Flywire delivered the highest full year guidance raise among its peers. The stock is up 38.1% since the results and currently trades at $25.

Is now the time to buy Flywire? Access our full analysis of the earnings results here, it's free.

Workiva (NYSE:WK)

Founded in 2010, Workiva (NYSE:WK) offers software as a service product that makes financial and compliance reporting easier, especially for publicly traded corporations.

Workiva reported revenues of $132.8 million, up 17.8% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth.

The stock is up 19.7% since the results and currently trades at $81.17.

Read our full analysis of Workiva's results here.

Marqeta (NASDAQ:MQ)

Founded by CEO Jason Gardner in 2009, Marqeta (NASDAQ: MQ) is an innovative card issuer that provides companies with the ability to issue and process virtual, physical, and tokenized credit and debit cards.

Marqeta reported revenues of $191.6 million, up 45.7% year on year, beating analyst expectations by 5.92%. It was a very strong quarter for the company, with exceptional revenue growth.

The stock is down 1.28% since the results and currently trades at $6.15.

Read our full, actionable report on Marqeta here, it's free.

Paycor (NASDAQ:PYCR)

Found in 1990 in Cincinnati, Ohio Paycor (NASDAQ: PYCR), provides software for small businesses to manage their payroll and HR needs in one place.

Paycor reported revenues of $118.3 million, up 27.5% year on year, beating analyst expectations by 4.42%. Despite the stock dropping on the results. it was a very strong quarter for the company, with full-year guidance beating analysts' expectations.

The stock is down 12.6% since the results and currently trades at $24.10.

Read our full, actionable report on Paycor here, it's free.

The author has no position in any of the stocks mentioned