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Workday Inc Class A WDAY

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Workday Beats in Q1 as it Ramps for Digital Transformation Opportunities; Shares Fairly Valued

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

Wide-moat Workday reported excellent first-quarter results, as revenue and adjusted EPS both exceeded our expectations. Workday experienced broad-based strength due to general digital transformation acceleration by enterprises--as Workday continues to be in a league of its own concerning cloud-only and cloud-first human capital management software. With much opportunity ahead for Workday to take more of total ERP share from legacy providers, like SAP and Oracle, Workday has plans to ramp up its headcount significantly. Workday’s incremental success wasn’t contained to this past quarter--as management has upped guidance for the fiscal year. We are raising our fair value estimate for wide-moat Workday to $229 per share from $219 per share. Our estimates for stronger near-term growth more than offset a modest increase in our estimated tax rate for Workday in light of potential U.S. tax changes. We consider Workday to be fairly valued, which contrasts with its peers SAP and Oracle, which we consider to be overvalued at the moment.

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Company Profile

Business Description

Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known for being a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 12,000 employees.

Contact
6110 Stoneridge Mall Road
Pleasanton, CA, 94588
T +1 925 951-9000
Sector Technology
Industry Software - Application
Most Recent Earnings Apr 30, 2021
Fiscal Year End Jan 31, 2022
Stock Type Speculative Growth
Employees 12,500

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