Workday (WDAY) & Its Peers Critical Analysis

Workday (NASDAQ:WDAY) is one of 959 public companies in the “Software” industry, but how does it contrast to its rivals? We will compare Workday to related businesses based on the strength of its institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Workday and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Workday	2	19	22	0	2.47
Workday Competitors	5835	21614	45009	1500	2.57

Workday presently has a consensus price target of $202.10, indicating a potential upside of 6.01%. As a group, “Software” companies have a potential upside of 28.12%. Given Workday’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Workday has less favorable growth aspects than its rivals.

Profitability

This table compares Workday and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Workday	12.32%	20.95%	9.22%
Workday Competitors	-599.60%	26.31%	-8.93%

Earnings and Valuation

This table compares Workday and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Workday	$10.15 billion	$693.00 million	38.67
Workday Competitors	$1.79 billion	$383.46 million	112.21

Workday has higher revenue and earnings than its rivals. Workday is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Workday has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Workday’s rivals have a beta of 1.35, indicating that their average stock price is 35% more volatile than the S&P 500.

Institutional and Insider Ownership

89.8% of Workday shares are owned by institutional investors. Comparatively, 41.5% of shares of all “Software” companies are owned by institutional investors. 18.6% of Workday shares are owned by company insiders. Comparatively, 19.9% of shares of all “Software” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Workday rivals beat Workday on 8 of the 13 factors compared.

Workday Company Profile

Workday, Inc. develops cloud-based software for managing human resources, finance and business operations. Its products include Workday Human Capital Management, Workday Financial Management and Workday Adaptive Planning, which help organizations manage areas such as workforce administration, accounting, budgeting and forecasting. Founded in 2005 by Dave Duffield and Aneel Bhusri, Workday serves businesses, governments and educational institutions across a range of industries. Its operations and customer base extend across North America and international markets.