Workday, Inc. WDAY is set to release fourth-quarter fiscal 2024 results on Feb 26, after the closing bell. It pulled off a trailing four-quarter earnings surprise of 13.23% on average.
Based in Pleasanton, CA, the company is expected to have recorded higher revenues driven by solid demand for its human capital management (HCM) and financial management solutions, along with its wide-ranging product portfolio, which continues to attract customers across the market. Management’s focus on integrating advanced artificial intelligence (AI) and machine learning (ML) capabilities is a tailwind.
Factors at Play
During the quarter, Workday announced an expanded collaboration with Accenture to help companies accelerate their adoption of skills-based talent strategies to unleash greater agility and potential. The AI-powered Workday Skill Cloud will enable businesses to effectively determine reskilling and upskilling opportunities within their operations that maximize future growth potential.
An integrated skills accelerator that leverages Workday Learning, Workday Journeys and Workday Prism is preconfigured with Accenture talent transformation capabilities to eliminate the disparities in skills and competencies among individuals or within a workforce. This is likely to have boosted revenues in the quarter.
Workday’s revenues continue to be aided by high demand for its HCM and financial management solutions. The company’s cloud-based business model and expanding product portfolio have been the primary growth drivers. Moreover, the growing clout of Workday Prism Analytics and Adaptive Insights business planning cloud offerings holds promise.
The company is expanding its portfolio beyond core HCM solutions into the financial domain. It is customizing them for diverse industries and verticals, such as education, the public and financial services, among others. This has helped it witness strong renewals and expand its customer base as business enterprises aim to consolidate spend and improve efficiency levels. The expanding product portfolio base is likely to have aided its fourth-quarter performance.
Our estimate for Subscription Services revenues is pegged at $1,755 million, suggesting 17.4% year-over-year growth. Our estimate for Professional Services revenues is pegged at $158 million.
For the December quarter, the Zacks Consensus Estimate for revenues is pegged at $1,913 million, up from the year-ago quarter’s reported figure of $1,646 million. The consensus estimate for adjusted earnings per share is pegged at $1.44, suggesting an increase from 99 cents reported in the prior year.
Earnings Whispers
Our proven model does not predict an earnings beat for Workday for the fiscal fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.44. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Workday, Inc. Price and EPS Surprise
Workday, Inc. price-eps-surprise | Workday, Inc. Quote
Zacks Rank: Workday currently carries a Zacks Rank #3.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
CommScope COMM is scheduled to report quarterly numbers on Feb 29. It has an Earnings ESP of +9.09% and a Zacks Rank of 3.
Heico HEI is scheduled to report quarterly numbers on Feb 26. It has an Earnings ESP of +1.77% and a Zacks Rank of 2.
VTEX VTEX is scheduled to report quarterly numbers on Feb 27. It has an Earnings ESP of +500.01% and a Zacks Rank of 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Top 5 ChatGPT Stocks Revealed
Zacks Senior Stock Strategist, Kevin Cook names 5 hand-picked stocks with sky-high growth potential in a brilliant sector of Artificial Intelligence. By 2030, the AI industry is predicted to have an internet and iPhone-scale economic impact of $15.7 Trillion.
Today you can invest in the wave of the future, an automation that answers follow-up questions … admits mistakes … challenges incorrect premises … rejects inappropriate requests. As one of the selected companies puts it, “Automation frees people from the mundane so they can accomplish the miraculous.”
Download Free ChatGPT Stock Report Right Now >>Workday, Inc. (WDAY) : Free Stock Analysis Report
Heico Corporation (HEI) : Free Stock Analysis Report
CommScope Holding Company, Inc. (COMM) : Free Stock Analysis Report
VTEX (VTEX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
