Workday (NASDAQ:WDAY) Shares Gap Up - Still a Buy?

Key Points

• Gapped up at the open from $122.40 to $129.09 (but last traded at $123.37) on heavy volume of 1.37M shares, showing volatile intraday price action despite a modest reported 3% move.
• Analysts are mixed — several firms have cut price targets recently, yet the MarketBeat consensus remains a Moderate Buy with an average price target of $199.71 (19 Buys, 14 Holds, 1 Sell).
• Fundamentals are mixed: Workday beat Q results (EPS $2.47 vs $2.32; revenue $2.53B vs $2.52B, +14.5% YoY), but there was significant insider selling (~989,814 shares, $131.6M last quarter), including a 107,500-share sale by major shareholder David Duffield.

Workday, Inc. (NASDAQ:WDAY - Get Free Report) shares gapped up before the market opened on Friday . The stock had previously closed at $122.40, but opened at $129.09. Workday shares last traded at $123.37, with a volume of 1,374,170 shares changing hands.

Wall Street Analysts Forecast Growth

WDAY has been the subject of several analyst reports. Sanford C. Bernstein reduced their price target on shares of Workday from $298.00 to $214.00 and set an "outperform" rating for the company in a research report on Wednesday, February 25th. The Goldman Sachs Group reduced their price target on shares of Workday from $238.00 to $206.00 and set a "neutral" rating for the company in a research report on Wednesday, February 25th. Wall Street Zen raised shares of Workday from a "hold" rating to a "buy" rating in a research report on Saturday, March 28th. Piper Sandler reduced their price target on shares of Workday from $200.00 to $135.00 and set a "neutral" rating for the company in a research report on Wednesday, February 25th. Finally, Jefferies Financial Group downgraded shares of Workday from a "buy" rating to a "hold" rating and reduced their price target for the company from $325.00 to $150.00 in a research report on Monday, February 23rd. Nineteen equities research analysts have rated the stock with a Buy rating, fourteen have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $199.71.

Workday Stock Up 3.0%

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's fifty day moving average is $130.01 and its 200-day moving average is $180.74. The company has a market cap of $32.41 billion, a PE ratio of 48.77, a PEG ratio of 1.19 and a beta of 1.14.

Workday (NASDAQ:WDAY - Get Free Report) last issued its earnings results on Tuesday, February 24th. The software maker reported $2.47 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.32 by $0.15. The company had revenue of $2.53 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%. The firm's quarterly revenue was up 14.5% on a year-over-year basis. During the same quarter last year, the company posted $1.92 earnings per share. On average, analysts predict that Workday, Inc. will post 5.11 EPS for the current year.

Insider Buying and Selling at Workday

In other news, insider Gerrit S. Kazmaier sold 9,356 shares of Workday 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 transaction, the insider owned 165,074 shares in the company, valued at $21,193,850.86. This trade represents a 5.36% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. 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, major shareholder David A. Duffield sold 107,500 shares of Workday stock in a transaction on Tuesday, March 31st. The stock was sold at an average price of $129.76, for a total transaction of $13,949,200.00. Following the transaction, the insider owned 105,049 shares in the company, valued at $13,631,158.24. This represents a 50.58% 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. Insiders have sold a total of 989,814 shares of company stock worth $131,576,291 in the last quarter. Corporate insiders own 19.31% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of the business. Simplicity Wealth LLC purchased a new position in shares of Workday during the 1st quarter worth $239,000. Sequoia Financial Advisors LLC boosted its stake in shares of Workday by 25.0% during the 1st quarter. Sequoia Financial Advisors LLC now owns 8,375 shares of the software maker's stock worth $1,088,000 after acquiring an additional 1,675 shares during the last quarter. Hsbc Holdings PLC boosted its stake in shares of Workday by 25.3% during the 1st quarter. Hsbc Holdings PLC now owns 710,309 shares of the software maker's stock worth $92,374,000 after acquiring an additional 143,274 shares during the last quarter. Waterfront Wealth Inc. lifted its stake in shares of Workday by 11.2% during the 1st quarter. Waterfront Wealth Inc. now owns 8,131 shares of the software maker's stock valued at $1,056,000 after buying an additional 819 shares in the last quarter. Finally, Azzad Asset Management Inc. ADV lifted its stake in shares of Workday by 8.4% during the 1st quarter. Azzad Asset Management Inc. ADV now owns 16,038 shares of the software maker's stock valued at $2,084,000 after buying an additional 1,244 shares in the last quarter. 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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