Workday (NASDAQ:WDAY) Shares Gap Up on Earnings Beat

Key Points

• Workday shares gapped up after the company reported stronger-than-expected quarterly results, opening at $128.74 versus a previous close of $121.85.
• The software maker posted $2.66 in EPS and $2.54 billion in revenue, both above analyst estimates, with revenue up 13.5% from a year earlier.
• Investor sentiment remained generally positive, with analysts mostly keeping bullish or neutral ratings and Workday highlighting continued AI-driven demand and new product momentum.

Workday, Inc. (NASDAQ:WDAY - Get Free Report)'s stock price gapped up before the market opened on Friday following a stronger than expected earnings report. The stock had previously closed at $121.85, but opened at $128.74. Workday shares last traded at $128.4130, with a volume of 3,115,963 shares changing hands.

The software maker reported $2.66 EPS for the quarter, beating the consensus estimate of $2.49 by $0.17. The firm had revenue of $2.54 billion for the quarter, compared to analyst estimates of $2.52 billion. Workday had a net margin of 7.26% and a return on equity of 13.37%. The business's quarterly revenue was up 13.5% compared to the same quarter last year. During the same period last year, the firm earned $2.23 EPS.

More Workday News

Here are the key news stories impacting Workday this week:

• Positive Sentiment: Workday beat first-quarter earnings and revenue estimates, driven by stronger demand for its AI-powered finance and HR software. Workday beats first-quarter estimates on steady software demand
• Positive Sentiment: The company raised margin expectations and emphasized AI momentum, which investors view as evidence the AI strategy is starting to pay off. Workday jumps 10% as it bumps up margin forecast on AI strength
• Positive Sentiment: Analysts remained broadly constructive after the report, with William Blair reiterating a Buy rating and Morgan Stanley maintaining a Hold with a $185 price target. Workday: Buy Rating Reaffirmed on Strong Q1 Beat, Rapid AI Monetization, Margin Upgrade and Attractive Valuation
• Neutral Sentiment: Piper Sandler raised its price target to $145 but kept a Neutral rating, while Needham cut its target to $180 but still maintained a Buy, signaling mixed but still mostly supportive analyst views. Analyst price-target updates for Workday
• Neutral Sentiment: Workday also introduced new AI tools for IT service management and travel, reinforcing the company’s product expansion narrative. Workday Announces Sana for IT Service Management and New Travel Agent

Wall Street Analyst Weigh In

WDAY has been the subject of several research analyst reports. Weiss Ratings downgraded shares of Workday from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Friday, March 20th. Jefferies Financial Group reiterated a "hold" rating and issued a $140.00 price target on shares of Workday in a research note on Friday. Oppenheimer reissued an "outperform" rating and set a $165.00 price target on shares of Workday in a report on Friday. DA Davidson dropped their price objective on Workday from $250.00 to $125.00 and set a "neutral" rating for the company in a research report on Wednesday, February 25th. Finally, Needham & Company LLC reduced their price objective on Workday from $300.00 to $180.00 and set a "buy" rating on the stock in a research note on Friday. Twenty investment analysts have rated the stock with a Buy rating, fourteen have given a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus price target of $193.78.

Insider Buying and Selling at Workday

In other Workday news, major shareholder David A. Duffield sold 107,500 shares of the stock in a transaction dated Tuesday, March 31st. The stock was sold at an average price of $129.76, for a total value of $13,949,200.00. Following the completion of the transaction, the insider directly owned 105,049 shares in the company, valued at approximately $13,631,158.24. This trade represents a 50.58% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through 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 Workday stock in a transaction dated Tuesday, April 7th. The shares were sold at an average price of $128.39, for a total value of $1,201,216.84. Following the sale, the insider directly owned 165,074 shares in the company, valued at $21,193,850.86. The trade was a 5.36% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 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. Insiders have sold 989,814 shares of company stock valued at $131,576,291 over the last quarter. Company insiders own 18.64% of the company's stock.

Institutional Investors Weigh In On Workday

A number of institutional investors have recently added to or reduced their stakes in the business. Finivi Inc. grew its stake in shares of Workday by 3.3% in the third quarter. Finivi Inc. now owns 1,516 shares of the software maker's stock worth $365,000 after purchasing an additional 48 shares during the last quarter. Strategic Investment Advisors MI raised its position in Workday by 1.6% during the 2nd quarter. Strategic Investment Advisors MI now owns 3,263 shares of the software maker's stock worth $777,000 after purchasing an additional 50 shares during the last quarter. Legacy Financial Advisors Inc. lifted its holdings in Workday by 5.1% during the 3rd quarter. Legacy Financial Advisors Inc. now owns 1,113 shares of the software maker's stock worth $268,000 after buying an additional 54 shares during the period. Sagespring Wealth Partners LLC grew its position in shares of Workday by 3.0% in the 4th quarter. Sagespring Wealth Partners LLC now owns 2,052 shares of the software maker's stock valued at $441,000 after buying an additional 59 shares during the last quarter. Finally, CVA Family Office LLC grew its position in shares of Workday by 35.3% in the 4th quarter. CVA Family Office LLC now owns 249 shares of the software maker's stock valued at $53,000 after buying an additional 65 shares during the last quarter. 89.81% of the stock is owned by institutional investors.

Workday Trading Up 5.1%

The company has a quick ratio of 1.32, a current ratio of 1.32 and a debt-to-equity ratio of 0.38. The company has a market cap of $32.92 billion, a price-to-earnings ratio of 49.45, a PEG ratio of 1.23 and a beta of 1.04. The firm has a 50 day moving average price of $126.10 and a two-hundred day moving average price of $169.57.

Workday Company Profile

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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