Advertisement
Canada markets open in 5 hours 11 minutes
  • S&P/TSX

    22,690.39
    -36.41 (-0.16%)
     
  • S&P 500

    5,505.00
    -39.59 (-0.71%)
     
  • DOW

    40,287.53
    -377.47 (-0.93%)
     
  • CAD/USD

    0.7277
    -0.0005 (-0.07%)
     
  • CRUDE OIL

    80.40
    +0.27 (+0.34%)
     
  • Bitcoin CAD

    92,559.88
    +683.41 (+0.74%)
     
  • CMC Crypto 200

    1,384.95
    -20.39 (-1.45%)
     
  • GOLD FUTURES

    2,404.40
    +5.30 (+0.22%)
     
  • RUSSELL 2000

    2,184.35
    -13.94 (-0.63%)
     
  • 10-Yr Bond

    4.2390
    +0.0500 (+1.19%)
     
  • NASDAQ futures

    19,814.00
    +101.00 (+0.51%)
     
  • VOLATILITY

    16.72
    +0.20 (+1.21%)
     
  • FTSE

    8,189.61
    +33.89 (+0.42%)
     
  • NIKKEI 225

    39,599.00
    -464.79 (-1.16%)
     
  • CAD/EUR

    0.6680
    -0.0010 (-0.15%)
     

Is Workday, Inc. (NASDAQ:WDAY) Potentially Undervalued?

Workday, Inc. (NASDAQ:WDAY) received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$207 at one point, and dropping to the lows of US$178. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Workday's current trading price of US$183 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Workday’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Workday

What's The Opportunity In Workday?

Great news for investors – Workday is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $241.69, but it is currently trading at US$183 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Workday’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Workday generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In the upcoming year, Workday's earnings are expected to increase by 95%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since WDAY is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

ADVERTISEMENT

Are you a potential investor? If you’ve been keeping an eye on WDAY for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy WDAY. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Workday has 2 warning signs we think you should be aware of.

If you are no longer interested in Workday, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here