Workday Earnings: What To Look For From WDAY

Jabin Bastian /
2023/11/27 2:00 am EST

Finance and HR software company Workday (NASDAQ:WDAY) will be announcing earnings results tomorrow after the bell. Here's what to expect.

Last quarter Workday reported revenues of $1.79 billion, up 16.3% year on year, in line with analyst expectations. It was a strong quarter for the company with EPS and free cash flow exceeding Wall Street's expectations by a wide margin. We also enjoyed seeing it lift its full-year revenue and adjusted operating margin guidance, driven by higher expectations for subscription services revenue.

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 15.4% year on year to $1.85 billion, slowing down from the 20.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.41 per share.

Workday Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. 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 0.9%.

Looking at Workday's peers in the finance and HR software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Bill.com delivered top-line growth of 32.6% year on year, beating analyst estimates by 2.1% and BlackLine reported revenues up 12.2% year on year, exceeding estimates by 0.6%. Bill.com traded down 38.6% on the results, BlackLine was up 2.2%.

Read our full analysis of Bill.com's results here and BlackLine's results here.

There has been positive sentiment among investors in the finance and HR software segment, with the stocks up on average 12% over the last month. Workday is up 14.7% during the same time, and is heading into the earnings with analyst price target of $257.3, compared to share price of $237.5.

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.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.

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