Workday (WDAY) Falling In After-Hours Activity

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 post-market laggard 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 $83.3 million.
  • WDAY is down 3.7% today from today's close.

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More details on WDAY:

Workday, Inc. provides enterprise cloud applications for global human resources and finance 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 11 analysts that rate Workday a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for Workday has been 1.5 million shares per day over the past 30 days. Workday has a market cap of $9.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.16 and a short float of 10.9% with 9.62 days to cover. Shares are up 11.8% year-to-date as of the close of trading on Friday.

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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 significantly decreased by 92.4% when compared to the same quarter one year ago, falling from -$35.98 million to -$69.22 million.
  • WORKDAY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. 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 -$1.00 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings (-$0.43 versus -$1.00).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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.
  • Despite currently having a low debt-to-equity ratio of 0.43, 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 3.93 is very high and demonstrates very strong liquidity.
  • The gross profit margin for WORKDAY INC is currently very high, coming in at 72.61%. 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 -37.05% is in-line with the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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