PreMarket Prep Stock Of The Day: Workday Gets Put To Work

It seems there is at least one epic disaster in the markets just about every day, with one or more issues falling 10% or more. Assuming that role on Friday was Worday Inc. WDAY, which is the PreMarket Prep Stock Of The Day.

The Company: Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known as a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 12,000 employees.

Fall From Grace: Similar to several other issues that participated in the high-growth/valuation tech bubble, Workday rallied to incredible levels and then came crashing down. From its pandemic low in March 2020 ($107.75), the issue peaked in November 2021 at $307.81.

Until Friday’s price action, the low for the recent slide was $157.49; it's now much lower than that as it reached $149.06 earlier in today's session.

Q1 Report: After Thursday's close, the company reported quarterly earnings of $0.83 per share, which missed the analyst consensus estimate of $0.86. This is a 4.6% decrease over earning from last year. The company reported quarterly sales of $1.43 billion, which met the analyst consensus estimate. This is a 21.7% increase over sales of $1.18 billion in the same period last year.

PreMarket Prep Take: “I think this may be a buy the dip opportunity," co-host Dennis Dick said. "Money managers are looking for places to put money to work... Money managers that have too much cash on hand are looking to put some to work.”

The author of this article noted the premarket low of $151.55 and the nice round number of $150 was mentioned as a possible entry on the long side.

Price Action: It has been a tricky day to buy the dip, but the strategy has prevailed once again depending on your timing. After a much lower open ($156.37 vs. $168.15), it had a brief rally to $158.09 and sharply reversed course.

The ensuing decline took the issue beyond the premarket low and just beyond the aforementioned $150 support level, bottoming at $149.07. Since making that low, it drifted back towards the highs for the session and closed at $158.79.

The discussion on the issue from Friday’s show can be found here: