Workday (NASDAQ:WDAY) Shares Gap Down - What's Next?

Key Points

• Workday shares gapped down ahead of Monday trading, opening at $140.48 after closing at $144.78, though the stock later traded near $143.13.
• Analyst sentiment remains mostly positive, with a Moderate Buy consensus and an average price target of $181.37. Recent calls included upgrades from Monness Crespi & Hardt and reaffirmed buy ratings from BTIG and Cantor Fitzgerald.
• Workday’s latest earnings topped expectations, posting $2.66 EPS on $2.54 billion in revenue, both above estimates and up 13.5% year over year. However, insider selling has been notable, with executives including Robert Enslin and Gerrit S. Kazmaier selling shares in recent weeks.

Workday, Inc. (NASDAQ:WDAY - Get Free Report)'s share price gapped down prior to trading on Monday . The stock had previously closed at $144.78, but opened at $140.48. Workday shares last traded at $143.1320, with a volume of 376,712 shares trading hands.

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on the company. Cantor Fitzgerald restated an "overweight" rating on shares of Workday in a report on Wednesday, June 17th. TD Cowen reiterated a "hold" rating on shares of Workday in a research report on Friday, May 22nd. Citigroup reissued a "market perform" rating on shares of Workday in a report on Friday, May 22nd. Monness Crespi & Hardt raised shares of Workday from a "neutral" rating to a "buy" rating and set a $150.00 price target for the company in a research note on Thursday, June 25th. Finally, BTIG Research reiterated a "buy" rating and set a $175.00 price target on shares of Workday in a report on Monday, May 18th. One investment analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating, fourteen have issued a Hold rating and two have given a Sell rating to the company. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus target price of $181.37.

Workday Price Performance

The firm has a market capitalization of $36.17 billion, a P/E ratio of 45.73, a PEG ratio of 1.55 and a beta of 1.11. The company has a fifty day moving average of $131.46 and a 200 day moving average of $144.02. The company has a debt-to-equity ratio of 0.30, a current ratio of 1.01 and a quick ratio of 1.01.

Workday (NASDAQ:WDAY - Get Free Report) last issued its quarterly earnings results on Thursday, May 21st. The software maker reported $2.66 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.51 by $0.15. Workday had a net margin of 8.60% and a return on equity of 14.75%. The firm had revenue of $2.54 billion for the quarter, compared to the consensus estimate of $2.52 billion. During the same quarter in the previous year, the company earned $2.23 EPS. The company's revenue for the quarter was up 13.5% on a year-over-year basis. Sell-side analysts predict that Workday, Inc. will post 5.34 earnings per share for the current year.

Insider Buying and Selling at Workday

In other Workday news, insider Robert Enslin sold 5,374 shares of the stock in a transaction dated Sunday, July 5th. The stock was sold at an average price of $134.90, for a total transaction of $724,952.60. Following the completion of the sale, the insider directly owned 239,469 shares in the company, valued at approximately $32,304,368.10. This trade represents a 2.19% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. 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. Also, insider Gerrit S. Kazmaier sold 2,728 shares of Workday stock in a transaction dated Tuesday, July 7th. The stock was sold at an average price of $143.62, for a total value of $391,795.36. Following the completion of the transaction, the insider directly owned 266,388 shares of the company's stock, valued at approximately $38,258,644.56. This trade represents a 1.01% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 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 ninety days, insiders have sold 875,020 shares of company stock valued at $113,938,503. 18.64% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Workday

Several institutional investors have recently added to or reduced their stakes in the business. Strategic Investment Advisors MI increased its stake in shares of Workday by 1.6% during the 2nd quarter. Strategic Investment Advisors MI now owns 3,263 shares of the software maker's stock valued at $777,000 after acquiring an additional 50 shares during the last quarter. Sagespring Wealth Partners LLC boosted its position in shares of Workday by 3.0% in the fourth quarter. Sagespring Wealth Partners LLC now owns 2,052 shares of the software maker's stock worth $441,000 after acquiring an additional 59 shares during the last quarter. CVA Family Office LLC grew its holdings in Workday by 35.3% in the fourth quarter. CVA Family Office LLC now owns 249 shares of the software maker's stock valued at $53,000 after purchasing an additional 65 shares during the period. Aspire Private Capital LLC increased its position in Workday by 1.3% during the fourth quarter. Aspire Private Capital LLC now owns 5,560 shares of the software maker's stock worth $1,194,000 after purchasing an additional 71 shares during the last quarter. Finally, Red Door Wealth Management LLC raised its stake in Workday by 5.0% during the fourth quarter. Red Door Wealth Management LLC now owns 1,620 shares of the software maker's stock worth $348,000 after purchasing an additional 77 shares during the period. 89.81% of the stock is owned by institutional investors and hedge funds.

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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