Workday (WDAY) Outpaces Stock Market Gains: What You Should Know

Workday (WDAY) closed at $206.83 in the latest trading session, marking a +1.98% move from the prior day. This change outpaced the S&P 500's 0.85% gain on the day. At the same time, the Dow added 0.77%, and the tech-heavy Nasdaq gained 1.08%.

Prior to today's trading, shares of the maker of human resources software had gained 7.1% over the past month. This has outpaced the Computer and Technology sector's loss of 4.99% and the S&P 500's loss of 2.06% in that time.

Investors will be hoping for strength from WDAY as it approaches its next earnings release, which is expected to be May 28, 2019. In that report, analysts expect WDAY to post earnings of $0.41 per share. This would mark year-over-year growth of 24.24%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $814.68 million, up 31.69% from the year-ago period.

WDAY's full-year Zacks Consensus Estimates are calling for earnings of $1.66 per share and revenue of $3.55 billion. These results would represent year-over-year changes of +22.06% and +25.88%, respectively.

Investors might also notice recent changes to analyst estimates for WDAY. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. WDAY is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note WDAY's current valuation metrics, including its Forward P/E ratio of 122.34. This valuation marks a premium compared to its industry's average Forward P/E of 59.41.

Meanwhile, WDAY's PEG ratio is currently 4.55. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 3.16 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 87, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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