Trade Insider
by trader on August 28, 2015

Workday Inc. (NYSE:WDAY) reported a loss of $69.4 million in its fiscal second quarter

(AP)Workday Inc. (NYSE:WDAY) reported a loss of $69.4 million in its fiscal second quarter.

On a per-share basis, the Pleasanton, California-based company said it had a loss of 37 cents. Earnings, adjusted for stock option expense and amortization costs, were 2 cents per share.

The results topped Wall Street expectations. The average estimate of 35 analysts surveyed by Zacks Investment Research was for a loss of 6 cents per share.

The maker of human resources software posted revenue of $282.7 million in the period, also surpassing Street forecasts. Thirty-five analysts surveyed by Zacks expected $274 million.

For the current quarter ending in November, Workday said it expects revenue in the range of $300 million to $303 million.

Workday shares have fallen 12 percent since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $72.04, a drop of 21 percent in the last 12 months.

Workday Equity Analysis

Workday Inc. (NYSE:WDAY) opened trading today as $74.11 and is trading in the range of 71.49-75.73 today. Workday’s current market cap stands at $14.08 billion.

Compared to other peers in the Application Software sector, Workday has outperformed in terms of quarterly revenue growth year over year at 0.57 vs. the industry average of 0.25. Workday’s earnings per share is currently at -1.35, which is below then the sector average of -.10.

Workday is currently covered by 27 Wall Street analysts. The mean target price is $98.76 according to First Call. This presents a solid upside to the current price of the equity. The Mean Recommendation sits at 2.3 which is based on 8 Strong Buy, 10 Buy and 19 Hold ratings.

The most recent analyst actions consisted of DA Davidson upgrading the stock on August 25th and Wunderlich initiating coverage with an initiation rating back in June.

The current quarter EPS consensus estimate is -0.04 with revenue estimates of 302.23M. Sales are expected to grow at a 40.50% rate. Workday reported actual earnings last quarter of .02 which beats the -0.06 consensus estimate, a 133.30% surprise.

Corporate Profile

Workday, Inc. provides enterprise cloud applications for finance and human resources in the United States and internationally. It offers applications for customers to manage critical business functions that enable them to optimize their financial and human capital resources. The company provides Workday Human Capital Management application that includes global human resources management comprising workforce lifecycle management, organization management, compensation, absence, and employee benefits administration; and global talent management consisting of goal management, performance management, succession planning, and career and development planning, as well as project and work management designed to enable organizations to create and manage and track initiatives, build project plans, and utilize project breakdown structures that include phases, tasks, and milestones. It also offers Workday Payroll, a payroll application designed to address the enterprise payroll needs; and Workday Financial Management tools that provide the core finance functions of general ledger, global accounting, revenue management, accounts payable, employee expense management, and accounts receivable, along with tools to help organizations manage their cash, assets, contracts, grants, expenses, procurement, and support their financial reporting requirements, as well as offer management reporting and analysis in real time. In addition, the company provides Workday Insight Applications that leverage advanced data science and machine learning methodologies to help customers make smarter financial and workforce decisions. It serves technology, financial services, business services, healthcare and life sciences, manufacturing, consumer and retail, and education and government industries.

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