Workday (NASDAQ:WDAY) Releases Earnings Results, Beats Estimates By $0.17 EPS

Key Points

• Workday beat quarterly expectations, reporting EPS of $2.66 versus the $2.49 consensus estimate and revenue of $2.54 billion versus expectations of $2.52 billion.
• The stock fell after the report, trading down $4.78 to $121.83, even as the company posted a 7.26% net margin and 13.37% return on equity.
• Investors are still watching for growth reacceleration and execution, with mixed analyst sentiment, recent target price cuts, and concerns about slowing growth and AI-pivot execution risk.

Workday (NASDAQ:WDAY - Get Free Report) issued its earnings results on Thursday. The software maker reported $2.66 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $2.49 by $0.17, FiscalAI reports. The company had revenue of $2.54 billion for the quarter, compared to analysts' expectations of $2.52 billion. Workday had a net margin of 7.26% and a return on equity of 13.37%.

Workday Stock Performance

Workday stock traded down $4.78 during trading hours on Thursday, hitting $121.83. The company had a trading volume of 5,748,715 shares, compared to its average volume of 5,040,581. The firm has a market cap of $31.31 billion, a PE ratio of 47.22, a PEG ratio of 1.26 and a beta of 1.04. The company has a debt-to-equity ratio of 0.38, a current ratio of 1.32 and a quick ratio of 1.32. Workday has a one year low of $110.36 and a one year high of $273.80. The firm has a 50-day moving average of $126.51 and a 200 day moving average of $170.40.

Key Stories Impacting Workday

Here are the key news stories impacting Workday this week:

• Positive Sentiment: Workday unveiled new AI products at Sana AI Summit, including Sana for IT Service Management and a Travel Agent, which could support its push to show AI-driven product momentum and strengthen its enterprise platform. Workday Announces Sana for IT Service Management and New Travel Agent
• Positive Sentiment: Analysts still expect Workday to deliver roughly in-line Q1 results, with consensus around $2.52 EPS on $2.52 billion revenue, suggesting the quarter may not be a major miss if execution holds up. Workday (WDAY) Q1 Earnings Preview: Can the Fallen Software Giant Rebound?
• Neutral Sentiment: Wall Street commentary ahead of the report has been mixed, with some analysts still optimistic while others focus on whether Workday can justify its long-term margin and revenue targets after leadership changes. Is Workday (WDAY) a Buy as Wall Street Analysts Look Optimistic?
• Negative Sentiment: Jefferies flagged execution risk ahead of earnings, citing slowing growth, questions about the AI pivot, and uncertainty around Workday’s ability to sustain targets under the returning CEO, Aneel Bhusri. Workday execution risk flagged by Jefferies ahead of quarterly earnings
• Negative Sentiment: Recent coverage also highlights that Workday’s shares have been weak heading into the print, reflecting investor skepticism after a steep year-to-date decline and concerns that the company must prove it can reaccelerate growth. Workday Gears Up For Q1 Print; Here Are The Recent Forecast Changes From Wall Street's Most Accurate Analysts

Insider Activity

In other Workday news, major shareholder David A. Duffield sold 107,500 shares of the stock in a transaction dated Tuesday, March 31st. The shares were sold at an average price of $129.76, for a total value of $13,949,200.00. Following the transaction, the insider directly owned 105,049 shares of the company's stock, valued at $13,631,158.24. This represents a 50.58% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Gerrit S. Kazmaier sold 9,356 shares of the stock in a transaction dated Tuesday, April 7th. The shares were sold at an average price of $128.39, for a total transaction of $1,201,216.84. Following the completion of the transaction, the insider directly owned 165,074 shares in the company, valued at approximately $21,193,850.86. This represents a 5.36% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders sold 989,814 shares of company stock worth $131,576,291. Insiders own 18.64% of the company's stock.

Institutional Trading of Workday

Several large investors have recently made changes to their positions in WDAY. Rakuten Securities Inc. acquired a new stake in shares of Workday during the 2nd quarter worth approximately $25,000. Measured Wealth Private Client Group LLC acquired a new position in shares of Workday during the third quarter worth $26,000. JPL Wealth Management LLC acquired a new position in shares of Workday during the third quarter worth $30,000. Quarry LP acquired a new position in shares of Workday during the fourth quarter worth $36,000. Finally, Aster Capital Management DIFC Ltd acquired a new position in shares of Workday during the fourth quarter worth $38,000. Institutional investors and hedge funds own 89.81% of the company's stock.

Analysts Set New Price Targets

A number of equities research analysts have recently issued reports on the stock. Mizuho dropped their target price on shares of Workday from $275.00 to $210.00 and set an "outperform" rating on the stock in a report on Wednesday, February 25th. The Goldman Sachs Group dropped their target price on shares of Workday from $238.00 to $206.00 and set a "neutral" rating on the stock in a report on Wednesday, February 25th. Guggenheim dropped their target price on shares of Workday from $285.00 to $275.00 and set a "buy" rating on the stock in a report on Wednesday, February 25th. Morgan Stanley dropped their target price on shares of Workday from $280.00 to $200.00 and set an "equal weight" rating on the stock in a report on Monday, February 23rd. Finally, Cantor Fitzgerald dropped their target price on shares of Workday from $200.00 to $160.00 and set an "overweight" rating on the stock in a report on Wednesday. Nineteen investment analysts have rated the stock with a Buy rating, thirteen have issued a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $198.42.

About Workday

Workday, Inc NASDAQ: WDAY is a provider of cloud-based enterprise applications focused on human capital management (HCM) and financial management. Founded in 2005 by Dave Duffield and Aneel Bhusri following their tenure at PeopleSoft, the company develops software-as-a-service solutions that help organizations manage workforce and financial processes in a unified, cloud-native environment. Workday's platform emphasizes continuous updates, data security, and a configurable architecture aimed at large and mid-sized enterprises.

The company's product portfolio centers on Workday Human Capital Management and Workday Financial Management, with additional offerings for payroll, talent management, workforce planning and analytics.

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