In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Workday WDAY against its key competitors in the Software industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
Workday Background
Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known for being a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 12,000 employees.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Workday Inc | 1271.46 | 12.11 | 11.47 | 1.76% | $0.23 | $1.42 | 16.67% |
| Adobe Inc | 53.06 | 17.16 | 14.83 | 9.18% | $2.06 | $4.41 | 11.56% |
| Salesforce Inc | 110.76 | 4.85 | 8.45 | 2.11% | $2.42 | $6.57 | 11.27% |
| SAP SE | 55.24 | 4.57 | 6.37 | 2.75% | $2.23 | $6.2 | 9.34% |
| Intuit Inc | 72.05 | 10.84 | 12.61 | 1.41% | $0.53 | $2.22 | 14.67% |
| Synopsys Inc | 72.67 | 14.28 | 15.29 | 5.77% | $0.48 | $1.27 | 24.51% |
| Cadence Design Systems Inc | 88.87 | 27.25 | 21.71 | 8.45% | $0.35 | $0.91 | 13.36% |
| Roper Technologies Inc | 42.81 | 3.34 | 9.48 | 2.26% | $0.72 | $1.13 | 3.2% |
| Autodesk Inc | 62.90 | 38.49 | 10.80 | 17.93% | $0.37 | $1.29 | 10.47% |
| Palantir Technologies Inc | 270.89 | 15.26 | 25.18 | 2.8% | $0.11 | $0.5 | 8.99% |
| Ansys Inc | 61.90 | 5.94 | 13.85 | 1.12% | $0.11 | $0.39 | -2.9% |
| Splunk Inc | 223.99 | 130.97 | 6.44 | 121.15% | $0.14 | $0.86 | 14.8% |
| PTC Inc | 92.46 | 7.80 | 10.05 | 2.42% | $0.16 | $0.44 | 18.09% |
| Zoom Video Communications Inc | 86.45 | 2.70 | 4.46 | 1.96% | $0.2 | $0.87 | 3.16% |
| Tyler Technologies Inc | 119.19 | 6.51 | 9.78 | 1.67% | $0.11 | $0.23 | 4.54% |
| Dynatrace Inc | 81.52 | 8.32 | 11.72 | 2.3% | $0.05 | $0.3 | 22.74% |
| Bentley Systems Inc | 96.04 | 22.61 | 14.55 | 7.94% | $0.1 | $0.24 | 14.27% |
| AppLovin Corp | 166.25 | 14.27 | 5.66 | 8.25% | $0.31 | $0.6 | 21.2% |
| Manhattan Associates Inc | 88.83 | 55.42 | 16.89 | 19.96% | $0.06 | $0.13 | 20.27% |
| NICE Ltd | 44.85 | 4.35 | 6.32 | 2.89% | $0.16 | $0.41 | 8.4% |
| Average | 99.51 | 20.79 | 11.81 | 11.7% | $0.56 | $1.52 | 12.21% |
After thoroughly examining Workday, the following trends can be inferred:
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The current Price to Earnings ratio of 1271.46 is 12.78x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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Considering a Price to Book ratio of 12.11, which is well below the industry average by 0.58x, the stock may be undervalued based on its book value compared to its peers.
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With a relatively low Price to Sales ratio of 11.47, which is 0.97x the industry average, the stock might be considered undervalued based on sales performance.
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The company has a lower Return on Equity (ROE) of 1.76%, which is 9.94% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $230 Million, which is 0.41x below the industry average. This potentially indicates lower profitability or financial challenges.
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The gross profit of $1.42 Billion is 0.93x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 16.67%, outperforming the industry average of 12.21%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When evaluating Workday alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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When comparing the debt-to-equity ratio, Workday is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.49.
Key Takeaways
Workday has a high PE ratio compared to its peers in the Software industry, indicating that investors are willing to pay a premium for its earnings. The company also has a low PB ratio, suggesting that its stock price is undervalued relative to its book value. Additionally, Workday has a low PS ratio, indicating that it is generating less revenue per share compared to its industry peers. In terms of profitability, the company has a low ROE, indicating lower returns on shareholder equity. Workday also has low EBITDA and gross profit margins, suggesting lower profitability and efficiency. However, the company has high revenue growth compared to its peers, indicating potential for future expansion.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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