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Workday (WDAY) Gains As Market Dips: What You Should Know

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In the latest trading session, Workday (WDAY - Free Report) closed at $186.34, marking a +0.11% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.04%. Elsewhere, the Dow lost 0.14%, while the tech-heavy Nasdaq added 2.14%.

Coming into today, shares of the maker of human resources software had lost 9.88% in the past month. In that same time, the Computer and Technology sector gained 4.01%, while the S&P 500 gained 5.1%.

Workday will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.10, up 32.53% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.67 billion, up 16.37% from the prior-year quarter.

WDAY's full-year Zacks Consensus Estimates are calling for earnings of $5.01 per share and revenue of $7.2 billion. These results would represent year-over-year changes of +37.64% and +15.82%, respectively.

Investors should also note any recent changes to analyst estimates for Workday. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. The Zacks Consensus EPS estimate has moved 9.91% higher within the past month. Workday currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, Workday is holding a Forward P/E ratio of 37.12. This represents a discount compared to its industry's average Forward P/E of 41.43.

Meanwhile, WDAY's PEG ratio is currently 1.44. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 1.56 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 62, putting it in the top 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WDAY in the coming trading sessions, be sure to utilize Zacks.com.


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