Workday Earnings: What To Look For From WDAY

Radek Strnad /
2022/02/28 6:54 am EST
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Finance and HR software company Workday (NASDAQ:WDAY) will be reporting earnings today after market hours. Here's what you need to know.

Last quarter Workday reported revenues of $1.32 billion, up 20% year on year, beating analyst revenue expectations by 1.19%. It was a decent quarter for the company, with revenue in line with analyst estimates.

Is Workday buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Workday's revenue to grow 20.5% year on year to $1.36 billion, improving on the 15.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.71 per share.

Workday Total Revenue

The analysts covering the company have had mixed opinions about the business heading into the earnings, with revenue estimates seeing 1 upward and 2 downward revisions over the last thirty days. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 1.48%.

Looking at Workday's peers in the finance and HR software segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Bill.com (NYSE:BILL) delivered top-line growth of 189% year on year, beating analyst estimates by 19.3% and Intuit (NASDAQ:INTU) reported revenues up 69.6% year on year, missing analyst estimates by 1.66%. Bill.com traded up 36.3% on the results, Intuit was down 1.94%. Read our full analysis of Bill.com's results here and Intuit's results here.

The whole tech sector has been facing a sell-off since late last year and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 7.13% over the last month. Workday is down 10.8% during the same time, and is heading into the earnings with analyst price target of $305.2, compared to share price of $225.5.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.