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Will Healthy Revenue Growth Boost Workday's (WDAY) Q2 Earnings?
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Workday, Inc. (WDAY - Free Report) is set to release second-quarter fiscal 2024 results on Aug 24, after market close. In the last reported quarter, the company delivered an earnings surprise of 18.02%. It pulled off a trailing four-quarter earnings surprise of 13.05%, on average.
The Pleasanton, CA-based organization is expected to report higher revenues year over year in the fiscal second quarter, backed by solid demand for its enterprise cloud applications for finance and human resources. Management’s approach to integrating advanced AI and ML capabilities is strengthening its portfolio and driving commercial expansion.
Factors at Play
In the fiscal second quarter, Workday announced the launch of the next-generation Elastic Hypercube Technology (“EHT”) to augment the capabilities of its Workday Adaptive Planning software. The software solution embeds AI and ML at its core, offering a range of features to support enterprises in financial planning, workforce and operational planning.
The upgraded EHT enables accelerated data integration that will expedite the import and export of large amounts of financial and non-financial data for complete and accurate models. Its advanced AI enhances the efficiency of complex model calculations and ensures dynamic, automatic scaling. This is likely to have generated incremental revenues in the quarter.
During the quarter, Mondelez, a leading global snacks company with an extensive global presence in 82 countries with over 90,000 employees, integrated Workday Adaptive Planning to streamline and enhance its workforce planning capabilities. The advanced features have improved visibility into its workforce, simplified the monthly plan-to-actuals variance analysis and accelerated decision-making.
Boeing, one of the leading airplane designers and manufacturers, also leveraged Workday solutions to standardize processes, enhance visibility, drive cost savings and improve operational efficiency. These developments are likely to have had a favorable effect on the fiscal second-quarter performance.
Our estimate for Subscription Services revenues is pegged at $1,612.3 million, suggesting 17.9% year-over-year growth. Our estimate for Professional Services revenues is pegged at $160.1 million.
For the July quarter, the Zacks Consensus Estimate for revenues is pegged at $1,773 million, up from the year-ago quarter’s reported figure of $1,536 million. The consensus estimate for adjusted earnings per share is pegged at $1.24, suggesting an increase from 83 cents reported in the prior year.
Earnings Whispers
Our proven model predicts a likely earnings beat for Workday for the fiscal second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +1.82%. The Most Accurate Estimate is pegged at $1.27 while the Zacks Consensus Estimate stands at $1.25. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Workday currently sports a Zacks Rank #1.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
Dycom Industries Inc. (DY - Free Report) has an Earnings ESP of +0.12% and a Zacks Rank of 3. The company is set to report its quarterly numbers on Aug 23.
PagSeguro Digital Ltd. (PAGS - Free Report) has an Earnings ESP of +6.93% and carries a Zacks Rank of 2. The company is set to report its quarterly numbers on Aug 24.
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Will Healthy Revenue Growth Boost Workday's (WDAY) Q2 Earnings?
Workday, Inc. (WDAY - Free Report) is set to release second-quarter fiscal 2024 results on Aug 24, after market close. In the last reported quarter, the company delivered an earnings surprise of 18.02%. It pulled off a trailing four-quarter earnings surprise of 13.05%, on average.
The Pleasanton, CA-based organization is expected to report higher revenues year over year in the fiscal second quarter, backed by solid demand for its enterprise cloud applications for finance and human resources. Management’s approach to integrating advanced AI and ML capabilities is strengthening its portfolio and driving commercial expansion.
Factors at Play
In the fiscal second quarter, Workday announced the launch of the next-generation Elastic Hypercube Technology (“EHT”) to augment the capabilities of its Workday Adaptive Planning software. The software solution embeds AI and ML at its core, offering a range of features to support enterprises in financial planning, workforce and operational planning.
The upgraded EHT enables accelerated data integration that will expedite the import and export of large amounts of financial and non-financial data for complete and accurate models. Its advanced AI enhances the efficiency of complex model calculations and ensures dynamic, automatic scaling. This is likely to have generated incremental revenues in the quarter.
During the quarter, Mondelez, a leading global snacks company with an extensive global presence in 82 countries with over 90,000 employees, integrated Workday Adaptive Planning to streamline and enhance its workforce planning capabilities. The advanced features have improved visibility into its workforce, simplified the monthly plan-to-actuals variance analysis and accelerated decision-making.
Boeing, one of the leading airplane designers and manufacturers, also leveraged Workday solutions to standardize processes, enhance visibility, drive cost savings and improve operational efficiency. These developments are likely to have had a favorable effect on the fiscal second-quarter performance.
Our estimate for Subscription Services revenues is pegged at $1,612.3 million, suggesting 17.9% year-over-year growth. Our estimate for Professional Services revenues is pegged at $160.1 million.
For the July quarter, the Zacks Consensus Estimate for revenues is pegged at $1,773 million, up from the year-ago quarter’s reported figure of $1,536 million. The consensus estimate for adjusted earnings per share is pegged at $1.24, suggesting an increase from 83 cents reported in the prior year.
Earnings Whispers
Our proven model predicts a likely earnings beat for Workday for the fiscal second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +1.82%. The Most Accurate Estimate is pegged at $1.27 while the Zacks Consensus Estimate stands at $1.25. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Workday, Inc. Price and EPS Surprise
Workday, Inc. price-eps-surprise | Workday, Inc. Quote
Zacks Rank: Workday currently sports a Zacks Rank #1.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +2.39% and sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Aug 23. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dycom Industries Inc. (DY - Free Report) has an Earnings ESP of +0.12% and a Zacks Rank of 3. The company is set to report its quarterly numbers on Aug 23.
PagSeguro Digital Ltd. (PAGS - Free Report) has an Earnings ESP of +6.93% and carries a Zacks Rank of 2. The company is set to report its quarterly numbers on Aug 24.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.