
Workday (WDAY) is a top American company that provides a Software-as-a-Service (SaaS) solution to over 10,000 companies globally. It serves over 60% of all companies in the Fortune 500. Its software helps clients in top areas like financial management, human capital management, planning, and analytics.
Workday’s human capital platform is highly popular because it is used across all phases of the hiring cycle. An HR professional uses it to create job descriptions, onboard workers, and manage them.Â
Workday has grown rapidly in the past few years, with most of this growth being organic and the rest being through acquisitions. Some of its top acquisitions were companies like Upshot, CapeClear, Gridcraft, and Identified. Unlike other companies like Salesforce and Microsoft, it has avoided making very large acquisitions.Â
Workday’s annual revenue has been in a strong uptrend in the past few years, moving from $3.6 billion in 2019 to $7.2 billion last year. This growth happened as it added more customers and increased the number of solutions it offers.Â
Workday stock was trading at $250 on Monday, while its HypeIndex figure jumped to 291%.

Positive hype
Workday’s positive hype increased after the company published strong financial results. Its trailing twelve-month subscription revenue rose by 17.3% to $7.4 billion.Â
Its operating income jumped to over $2.06 billion in the same period, while its operating cash flow rose to $2.34 billion.Â
Workday continued to see strong customer growth in the last quarter. Some of its top clients that joined its platform are Royal Mail, Lenovo, Ingram, Decathlon, and Estia Health.Â
Workday is increasing its innovation in the artificial intelligence industry through Workday Illuminate. It also launched several AI agents to streamline and simplify its HR and finance processes.
Workday has been recognized by top companies like Gartner, which named it a leader in its Magic Quadrant for HCM, ERP, and planning.
Its guidance, while softer than expected, showed that the company was still having double-digit growth. It expects to have $2.1 billion in revenues in the last quarter, an increase of 13% from the same period last year.Â
Workday’s solutions are highly necessary in the corporate sector, which explains why it experiences little churn. Companies rarely change their service providers because of the rising costs of implementing and training their employees.Â
Workday has higher margins and room to grow them. It has a gross profit margin of 75.60% and a net income margin of 16%.
Negative hype
There are signs that the company is a bit overvalued. Its rule of 40 metric, which is calculated using margins and growth, stands at 38, lower than the key level of 40.Â
Workday has a forward P.E ratio of 35, higher than the sector median of 25. Its forward EV to EBITDA multiple of 25 is lower than the sector median of 15.
Analysts have a muted estimate of the Workday stock price. Loop Capital has a hold rating, while Piper Sandler downgraded it from overweight to neutral.Â
Workday may struggle to add more customers because it has already reached over 60% of all Fortune 500 companies.
Summary of Workday stock

The weekly chart shows that the Workday share price has sent mixed signals in the past few months. It formed a double-top chart pattern at $307, where it struggled to move above. A double-top is one of the most bearish chart patterns in technical analysis.
Workday has remained above the 50-week and 100-week Exponential Moving Averages (EMA), which is a positive sign. It has also formed a hammer pattern, which is made up of a body and a long lower shadow. Therefore, there is a likelihood that it will bounce back as the post-earnings dip fades. If this happens, the stock will likely rise to $300.
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