Workday, Inc.
Workday, Inc. Fundamental Analysis
Workday, Inc. (WDAY) shows weak financial fundamentals with a PE ratio of 56.91, profit margin of 6.95%, and ROE of 7.13%. The company generates $9.3B in annual revenue with strong year-over-year growth of 16.11%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 67.9/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze WDAY's fundamental strength across five key dimensions:
Efficiency Score
WeakWDAY struggles to generate sufficient returns from assets.
Valuation Score
WeakWDAY trades at a premium to fair value.
Growth Score
ModerateWDAY shows steady but slowing expansion.
Financial Health Score
ExcellentWDAY maintains a strong and stable balance sheet.
Profitability Score
WeakWDAY struggles to sustain strong margins.
Key Financial Metrics
Is WDAY Expensive or Cheap?
P/E Ratio
WDAY trades at 56.91 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, WDAY's PEG of 5.67 indicates potential overvaluation.
Price to Book
The market values Workday, Inc. at 4.11 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 26.82 times EBITDA. This signals the market has high growth expectations.
How Well Does WDAY Make Money?
Net Profit Margin
For every $100 in sales, Workday, Inc. keeps $6.95 as profit after all expenses.
Operating Margin
Core operations generate 6.73 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $7.13 in profit for every $100 of shareholder equity.
ROA
Workday, Inc. generates $3.62 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Workday, Inc. generates strong operating cash flow of $2.78B, reflecting robust business health.
Free Cash Flow
Workday, Inc. generates strong free cash flow of $2.59B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $9.70 in free cash annually.
FCF Yield
WDAY converts 7.05% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
56.91
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
5.67
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.11
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.97
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.43
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.83
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.07
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How WDAY Stacks Against Its Sector Peers
| Metric | WDAY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 56.91 | 35.19 | Worse (Expensive) |
| ROE | 7.13% | 1155.00% | Weak |
| Net Margin | 6.95% | -127067.00% (disorted) | Weak |
| Debt/Equity | 0.43 | 0.41 | Neutral |
| Current Ratio | 1.83 | 4.71 | Neutral |
| ROA | 3.62% | -314918.00% (disorted) | Weak |
WDAY outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Workday, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
111.02%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
373.89%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
193.84%
Industry Style: Growth, Innovation, High Beta
High Growth