In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Workday WDAY and its primary competitors in the Software industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 | 1274.75 | 12.15 | 11.50 | 1.76% | $0.23 | $1.42 | 16.67% |
| Salesforce Inc | 111.33 | 4.88 | 8.49 | 2.11% | $2.42 | $6.57 | 11.27% |
| Adobe Inc | 46.82 | 15.14 | 13.09 | 9.18% | $2.06 | $4.41 | 11.56% |
| SAP SE | 55.82 | 4.62 | 6.44 | 2.75% | $2.23 | $6.2 | 9.34% |
| Intuit Inc | 67.39 | 10.92 | 12.39 | 2.08% | $0.6 | $2.53 | 11.34% |
| Synopsys Inc | 63.54 | 13.16 | 14.58 | 7.01% | $0.42 | $1.32 | 3.13% |
| Cadence Design Systems Inc | 79.46 | 24.27 | 20.24 | 9.94% | $0.41 | $0.96 | 18.75% |
| Roper Technologies Inc | 43.71 | 3.42 | 9.68 | 2.26% | $0.72 | $1.13 | 12.76% |
| Autodesk Inc | 60.66 | 37.12 | 10.42 | 17.93% | $0.37 | $1.29 | 10.47% |
| Palantir Technologies Inc | 255.22 | 14.62 | 23.72 | 2.8% | $0.11 | $0.5 | 19.61% |
| Datadog Inc | 925.07 | 21.22 | 21.32 | 2.82% | $0.07 | $0.48 | 7.69% |
| Ansys Inc | 59.49 | 5.50 | 13.12 | 5.29% | $0.37 | $0.74 | 15.99% |
| Splunk Inc | 225.43 | 131.82 | 6.48 | 121.15% | $0.14 | $0.86 | 14.8% |
| PTC Inc | 91.38 | 7.71 | 9.93 | 2.42% | $0.16 | $0.44 | 18.09% |
| AppLovin Corp | 58.56 | 15.53 | 6.34 | 14.58% | $0.37 | $0.68 | 10.3% |
| Zoom Video Communications Inc | 83.42 | 2.60 | 4.30 | 1.96% | $0.2 | $0.87 | 3.16% |
| Tyler Technologies Inc | 112.75 | 6.30 | 9.59 | 1.34% | $0.09 | $0.21 | 6.35% |
| Bentley Systems Inc | 94.85 | 22.33 | 14.37 | 7.94% | $0.1 | $0.24 | 14.27% |
| Manhattan Associates Inc | 88.26 | 55.07 | 16.78 | 19.96% | $0.06 | $0.13 | 20.27% |
| NICE Ltd | 46.61 | 4.52 | 6.64 | 2.49% | $0.16 | $0.42 | 3.63% |
| Dynatrace Inc | 75.77 | 7.73 | 10.90 | 2.3% | $0.05 | $0.3 | 22.74% |
| Average | 132.28 | 20.42 | 11.94 | 11.92% | $0.56 | $1.51 | 12.28% |
By conducting a comprehensive analysis of Workday, the following trends become evident:
-
The Price to Earnings ratio of 1274.75 for this company is 9.64x above the industry average, indicating a premium valuation associated with the stock.
-
Considering a Price to Book ratio of 12.15, which is well below the industry average by 0.6x, the stock may be undervalued based on its book value compared to its peers.
-
Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 11.5, which is 0.96x the industry average.
-
The company has a lower Return on Equity (ROE) of 1.76%, which is 10.16% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
-
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.
-
The company has lower gross profit of $1.42 Billion, which indicates 0.94x below the industry average. This potentially indicates lower revenue after accounting for production costs.
-
The company's revenue growth of 16.67% is notably higher compared to the industry average of 12.28%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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.
By considering the Debt-to-Equity ratio, Workday can be compared to its top 4 peers, leading to the following observations:
-
Workday exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.49.
-
This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.
Key Takeaways
For Workday in the Software industry, the PE ratio is high compared to peers, indicating potential overvaluation. The PB and PS ratios are low, suggesting undervaluation relative to industry peers. In terms of ROE, EBITDA, gross profit, and revenue growth, Workday shows lower performance levels compared to its industry counterparts.
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.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
