Pre-Market Activity Shows Heavy Volume And Movement For Workday (WDAY)

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.

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 $133.3 million.
  • WDAY traded 202,655 shares today in the pre-market hours as of 9:15 AM, representing 12.7% of its average daily volume.

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More details on WDAY:

Workday, Inc. provides enterprise cloud applications for finance and human resources 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 15 analysts that rate Workday a buy, no analysts rate it a sell, and 9 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 $9.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.15 and a short float of 8.5% with 6.33 days to cover. Shares are up 12.9% 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. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:
  • 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.

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