Contrasting Twilio (TWLO) & Workday (WDAY)

Workday (NASDAQ: WDAY) and Twilio (NYSE:TWLO) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Volatility and Risk

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Workday has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500. Comparatively, Twilio has a beta of -0.49, suggesting that its share price is 149% less volatile than the S&P 500.

Institutional & Insider Ownership

70.0% of Workday shares are held by institutional investors. Comparatively, 60.3% of Twilio shares are held by institutional investors. 37.7% of Workday shares are held by company insiders. Comparatively, 25.0% of Twilio shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Workday and Twilio, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Workday 1 18 16 0 2.43
Twilio 1 2 14 0 2.76

Workday currently has a consensus price target of $119.53, indicating a potential downside of 4.56%. Twilio has a consensus price target of $38.14, indicating a potential upside of 4.07%. Given Twilio’s stronger consensus rating and higher possible upside, analysts clearly believe Twilio is more favorable than Workday.

Profitability

This table compares Workday and Twilio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Workday -14.99% -16.31% -5.84%
Twilio -15.97% -19.52% -15.64%

Earnings & Valuation

This table compares Workday and Twilio’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Workday $2.14 billion 12.27 -$321.22 million ($1.27) -98.61
Twilio $399.02 million 8.66 -$63.70 million ($0.78) -46.99

Twilio has lower revenue, but higher earnings than Workday. Workday is trading at a lower price-to-earnings ratio than Twilio, indicating that it is currently the more affordable of the two stocks.

Summary

Workday beats Twilio on 9 of the 14 factors compared between the two stocks.

About Workday

Workday, Inc. is a provider of enterprise cloud applications for finance and human resources. The Company delivers financial management, human capital management and analytics applications designed for various companies, educational institutions and government agencies. As part of its applications, the Company provides embedded analytics that capture the content and context of everyday business events, facilitating informed decision-making from wherever users are working. Its applications include Workday Financial Management, Workday Human Capital Management (HCM) and Other Applications. It also provides open, standards-based Web-services application programming interfaces, and pre-built packaged integrations and connectors. Workday Financial Management is a unified application with a range of financial capabilities, relevant analytics and metrics, and auditable process management. Workday HCM allows an organization to staff, pay, organize and develop its global workforce.

About Twilio

Twilio Inc. provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications in the United States and internationally. The company's programmable communications cloud provides a set of application programming interfaces that enable developers to embed voice, messaging, and video capabilities into their applications. Twilio Inc. was founded in 2008 and is headquartered in San Francisco, California.

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