Workday Shares Poised for Post-Earnings Boost
Workday (NASDAQ:WDAY) shares may be due for a boost before its August 27 earnings report, according to analysts. The company has delivered four consecutive EPS beats and the prediction market is pricing a 0.91 probability of another beat.
The forward P/E multiple is 18 against a PEG ratio of 0.75, indicating that investors are paying growth-at-a-reasonable-price multiples for a business converting revenue into cash at scale.
Management guided Q2 FY2027 subscription revenue to approximately $2.455 billion, growth of 13%, and CRPO growth of 13.5% to 14.5%. Additionally, new ACV from agentic AI products grew more than 200% year over year.
Reuters reported on August 13 that Silver Lake is in talks to buy Workday, adding a takeout premium to the stock's value. Shares have risen 39.77% over the past month, and history suggests the payoff often comes after the report settles: the average one-week post-earnings move is +7.83%.
Workday is also outpacing Salesforce (NYSE:CRM) in subscription revenue growth at 14%, while CEO Aneel Bhusri stated that customers are 'looking to us first for AI solutions for the HR and finance worlds'. The company's non-GAAP operating margin of 31.8% and 97% gross revenue retention anchor a purer cloud HCM story than Oracle (NYSE:ORCL) Fusion.
Bears point to the trailing multiple and insider selling, but these are backward-looking metrics that don't reflect the company's accelerating growth. Multiples compress when growth stalls, which is not happening here.