Workday (NASDAQ:WDAY) Shares Gap Down - Here's What Happened

Key Points

• Workday shares gapped down ahead of trading, opening at $124.81 after closing at $129.34, and were last traded near $126.10.
• Analyst sentiment remains mixed but generally positive: Workday has a Moderate Buy consensus, with 19 Buy ratings, 13 Hold ratings, and 2 Sell ratings, and a consensus price target of $198.42.
• The company recently posted better-than-expected earnings, reporting $2.47 EPS on $2.53 billion in revenue, while insiders have also been selling shares in recent months, including major shareholder David A. Duffield.

Workday, Inc. (NASDAQ:WDAY - Get Free Report)'s share price gapped down prior to trading on Wednesday . The stock had previously closed at $129.34, but opened at $124.81. Workday shares last traded at $126.0950, with a volume of 913,714 shares changing hands.

Analysts Set New Price Targets

WDAY has been the subject of a number of research analyst reports. Needham & Company LLC reaffirmed a "buy" rating and issued a $300.00 target price on shares of Workday in a report on Wednesday, February 25th. Loop Capital set a $210.00 target price on Workday in a research note on Thursday, March 12th. Stifel Nicolaus set a $175.00 price target on Workday in a research report on Monday, February 9th. Barclays dropped their price target on Workday from $230.00 to $200.00 and set an "overweight" rating for the company in a research report on Wednesday, February 25th. Finally, Jefferies Financial Group downgraded Workday from a "buy" rating to a "hold" rating and dropped their price target for the stock from $325.00 to $150.00 in a research report on Monday, February 23rd. Nineteen research analysts have rated the stock with a Buy rating, thirteen have given a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $198.42.

Workday Stock Performance

The company has a market cap of $32.53 billion, a price-to-earnings ratio of 49.02, a price-to-earnings-growth ratio of 1.25 and a beta of 1.04. The stock's fifty day simple moving average is $126.94 and its two-hundred day simple moving average is $171.14. The company has a debt-to-equity ratio of 0.38, a quick ratio of 1.32 and a current ratio of 1.32.

Workday (NASDAQ:WDAY - Get Free Report) last issued its earnings results on Tuesday, February 24th. The software maker reported $2.47 EPS for the quarter, beating analysts' consensus estimates of $2.32 by $0.15. Workday had a net margin of 7.26% and a return on equity of 13.37%. The business had revenue of $2.53 billion for the quarter, compared to the consensus estimate of $2.52 billion. During the same quarter last year, the firm posted $1.92 EPS. The business's revenue for the quarter was up 14.5% compared to the same quarter last year. Equities research analysts anticipate that Workday, Inc. will post 5.11 EPS for the current year.

Insiders Place Their Bets

In other news, major shareholder David A. Duffield sold 107,500 shares of the firm's stock in a transaction on 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 owned 105,049 shares of the company's stock, valued at approximately $13,631,158.24. This trade represents a 50.58% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Gerrit S. Kazmaier sold 9,356 shares of the firm's stock in a transaction on 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 position. 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. In 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 Investors Weigh In On Workday

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Western Wealth Management LLC purchased a new stake in Workday during the 1st quarter worth $39,000. Oddo BHF Asset Management Sas increased its stake in Workday by 5.7% during the 1st quarter. Oddo BHF Asset Management Sas now owns 7,019 shares of the software maker's stock worth $912,000 after buying an additional 378 shares during the period. Ashton Thomas Securities LLC increased its stake in Workday by 6.2% during the 1st quarter. Ashton Thomas Securities LLC now owns 2,206 shares of the software maker's stock worth $287,000 after buying an additional 128 shares during the period. Arkadios Wealth Advisors increased its stake in Workday by 18.0% during the 1st quarter. Arkadios Wealth Advisors now owns 5,335 shares of the software maker's stock worth $693,000 after buying an additional 812 shares during the period. Finally, South Dakota Investment Council purchased a new stake in Workday during the 1st quarter worth $948,000. Hedge funds and other institutional investors own 89.81% of the company's stock.

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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