Stock Story -
Finance and HR software company Workday (NASDAQ:WDAY) will be announcing earnings results tomorrow after market hours. Here’s what to expect.
Workday beat analysts’ revenue expectations by 0.6% last quarter, reporting revenues of $2.09 billion, up 16.7% year on year. It was a softer quarter for the company. While profitability metrics like EBITDA also beat analysts' estimates, some of the key top-line metrics, including billings and annual recurring revenue, fell below expectations.
Is Workday a buy or sell going into earnings? Find out by reading the original article on StockStory, it’s free.
This quarter, analysts are expecting Workday’s revenue to grow 14.2% year on year to $2.13 billion, slowing from the 16.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.76 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Workday has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 0.8% on average.
Looking at Workday’s peers in the finance and HR software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Bill.com delivered year-on-year revenue growth of 17.5%, beating analysts’ expectations by 3.3%, and Flywire (NASDAQ:FLYW) reported revenues up 27.2%, topping estimates by 7.1%. Bill.com traded up 17.6% following the results while Flywire was also up 14.8%.
Read the full analysis of Bill.com’s and Flywire’s results on StockStory.
There has been positive sentiment among investors in the finance and HR software segment, with share prices up 18.1% on average over the last month. Workday is up 14.5% during the same time and is heading into earnings with an average analyst price target of $292.00 (compared to the current share price of $269).