Workday (NASDAQ:WDAY) Stock Price Down 9.4% - What's Next?

Key Points

• Workday shares fell 9.4% in midday trading to about $152.18, with trading volume significantly below its average.
• Analyst sentiment remains mixed: Morgan Stanley and CLSA downgraded the stock, while the broader analyst consensus is still “Moderate Buy” with an average price target of $179.80.
• Workday recently exceeded quarterly earnings and revenue estimates, reporting $2.66 in EPS and $2.54 billion in revenue, up 13.5% year over year; however, insiders have sold substantial shares over the past quarter.

Workday, Inc. (NASDAQ:WDAY - Get Free Report)'s stock price fell 9.4% during mid-day trading on Thursday . The stock traded as low as $153.92 and last traded at $152.1840. 1,173,744 shares traded hands during mid-day trading, a decline of 77% from the average daily volume of 5,096,620 shares. The stock had previously closed at $168.01.

Analysts Set New Price Targets

A number of brokerages have recently weighed in on WDAY. Morgan Stanley lowered Workday from an "equal weight" rating to an "underweight" rating and lowered their target price for the stock from $185.00 to $145.00 in a research report on Tuesday, July 21st. Oppenheimer restated an "outperform" rating on shares of Workday in a report on Thursday, June 11th. Bank of America started coverage on shares of Workday in a report on Wednesday, May 27th. They set a "neutral" rating and a $140.00 price objective for the company. BMO Capital Markets restated an "outperform" rating on shares of Workday in a report on Friday, May 22nd. Finally, CLSA initiated coverage on shares of Workday in a research report on Monday, July 20th. They issued an "underperform" rating and a $92.00 price target on the stock. One analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating, thirteen have issued a Hold rating and three have assigned a Sell rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average target price of $179.80.

Workday Stock Down 8.8%

The company has a current ratio of 1.01, a quick ratio of 1.01 and a debt-to-equity ratio of 0.30. The firm has a market capitalization of $37.87 billion, a P/E ratio of 47.85, a P/E/G ratio of 1.70 and a beta of 1.11. The stock's 50-day simple moving average is $134.94 and its 200-day simple moving average is $140.27.

Workday (NASDAQ:WDAY - Get Free Report) last announced its earnings results on Thursday, May 21st. The software maker reported $2.66 earnings per share for the quarter, topping analysts' consensus estimates of $2.51 by $0.15. The firm had revenue of $2.54 billion for the quarter, compared to the consensus estimate of $2.52 billion. Workday had a return on equity of 14.75% and a net margin of 8.60%.The company's revenue was up 13.5% compared to the same quarter last year. During the same quarter in the previous year, the business earned $2.23 EPS. As a group, research analysts predict that Workday, Inc. will post 5.38 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, CAO Mark S. Garfield sold 918 shares of the stock in a transaction dated Friday, July 10th. The shares were sold at an average price of $142.19, for a total value of $130,530.42. Following the sale, the chief accounting officer directly owned 73,718 shares of the company's stock, valued at approximately $10,481,962.42. This represents a 1.23% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Zane Rowe sold 6,000 shares of the firm's stock in a transaction on Tuesday, July 7th. The shares were sold at an average price of $143.70, for a total transaction of $862,200.00. Following the completion of the transaction, the chief financial officer directly owned 288,460 shares of the company's stock, valued at approximately $41,451,702. The trade was a 2.04% 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. Over the last quarter, insiders have sold 875,020 shares of company stock valued at $113,938,503. Corporate insiders own 18.64% of the company's stock.

Institutional Inflows and Outflows

Large investors have recently made changes to their positions in the business. Vanguard Group Inc. increased its stake in shares of Workday by 14.7% in the fourth quarter. Vanguard Group Inc. now owns 25,009,288 shares of the software maker's stock worth $5,371,495,000 after buying an additional 3,210,232 shares during the period. Auto Owners Insurance Co boosted its position in Workday by 25,412.8% during the 4th quarter. Auto Owners Insurance Co now owns 10,230,616 shares of the software maker's stock valued at $2,197,332,000 after buying an additional 10,190,516 shares during the period. State Street Corp grew its holdings in Workday by 1.0% in the 4th quarter. State Street Corp now owns 9,770,707 shares of the software maker's stock worth $2,098,552,000 after acquiring an additional 96,139 shares during the last quarter. Hotchkis & Wiley Capital Management LLC increased its position in shares of Workday by 47.5% in the third quarter. Hotchkis & Wiley Capital Management LLC now owns 5,842,491 shares of the software maker's stock valued at $1,406,463,000 after acquiring an additional 1,882,391 shares during the period. Finally, Geode Capital Management LLC increased its position in shares of Workday by 1.5% in the fourth quarter. Geode Capital Management LLC now owns 5,091,926 shares of the software maker's stock valued at $1,089,970,000 after acquiring an additional 75,922 shares during the period. 89.81% of the stock is owned by hedge funds and other institutional investors.

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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