Workday (WDAY) Moving On Heavy Pre-Market Trading

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Workday ( WDAY) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Workday as such a stock due to the following factors:

  • WDAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $125.7 million.
  • WDAY traded 154,342 shares today in the pre-market hours as of 8:54 AM, representing 11.4% of its average daily volume.

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More details on WDAY:

Workday, Inc. provides enterprise cloud-based applications for enterprises in the United States and internationally. It offers applications for customers to manage critical business functions that enable them to optimize their financial and human capital resources. Currently there are 9 analysts that rate Workday a buy, no analysts rate it a sell, and 12 rate it a hold.

The average volume for Workday has been 1.1 million shares per day over the past 30 days. Workday has a market cap of $7.0 billion and is part of the technology sector and computer software & services industry. Shares are up 5.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Workday as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has decreased by 15.1% when compared to the same quarter one year ago, dropping from -$41.31 million to -$47.53 million.
  • WORKDAY INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. For the next year, the market is expecting a contraction of 24.4% in earnings (-$0.56 versus -$0.45).
  • WDAY's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.79 is very high and demonstrates very strong liquidity.
  • 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 gross profit margin for WORKDAY INC is rather high; currently it is at 69.32%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -37.17% is in-line with the industry average.

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