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Workday (WDAY) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Workday (WDAY) closed at $155.71, marking a +1.27% move from the previous day. This change outpaced the S&P 500's 0.01% gain on the day. At the same time, the Dow added 0.35%, and the tech-heavy Nasdaq gained 0.45%.

Heading into today, shares of the maker of human resources software had gained 23.93% over the past month, outpacing the Computer and Technology sector's loss of 5.51% and the S&P 500's loss of 7.29% in that time.

Wall Street will be looking for positivity from WDAY as it approaches its next earnings report date. This is expected to be February 26, 2019. On that day, WDAY is projected to report earnings of $0.32 per share, which would represent year-over-year growth of 14.29%. Our most recent consensus estimate is calling for quarterly revenue of $776.59 million, up 33.33% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.26 per share and revenue of $2.81 billion, which would represent changes of +22.33% and +31.1%, respectively, from the prior year.

Any recent changes to analyst estimates for WDAY should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.95% higher. WDAY is currently a Zacks Rank #3 (Hold).

Investors should also note WDAY's current valuation metrics, including its Forward P/E ratio of 121.78. This valuation marks a premium compared to its industry's average Forward P/E of 50.23.

It is also worth noting that WDAY currently has a PEG ratio of 3.9. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WDAY's industry had an average PEG ratio of 2.78 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 25, which puts it in the top 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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