NEW YORK (TheStreet) -- Shares of Workday Inc (WDAY) - Get Report are down 0.42% to $91.79 in early market trading Tuesday, ahead of the enterprise cloud app provider's first quarter earnings release, due out after the closing bell later today.
Analysts expect the company to narrow its loss and show a more than 50% growth in sales compared to the same quarter of last year.
For the first quarter, Wall Street projects a loss of 8 cents a share on revenue of $245 million, according to analysts surveyed by Thomson Reuters.
In the same quarter a year ago, Workday posted a loss of 13 cents per share on revenue of $160 million.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio says Workday is a very expensive stock that's doing pretty well.
"They are doing incredibly well, moving aggressively into the vertical for human capital management and also getting into the financial side," Cramer said in a video.
He added that Workday should be strong and offer positive pin action for other cloud stocks when it reports its earnings results.
Pleasanton, Calif.-based Workday is a provider of enterprise cloud applications for global human resources and finance. The company delivers human capital management, financial management, and analytics applications designed for organizations.
The company provides its customers the applications to manage critical business functions for their financial and human capital resources.
Separately, TheStreet Ratings team rates WORKDAY INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WORKDAY INC (WDAY) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, WORKDAY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income has decreased by 6.2% when compared to the same quarter one year ago, dropping from -$55.98 million to -$59.47 million.
- WORKDAY INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, WORKDAY INC reported poor results of -$1.35 versus -$1.00 in the prior year. This year, the market expects an improvement in earnings (-$0.22 versus -$1.35).
- Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.19 is very high and demonstrates very strong liquidity.
- You can view the full analysis from the report here: WDAY Ratings Report