Workday Inc. (WDAY, Financial), a finance and human resources cloud applications provider, will announce the first quarter of fiscal 2019 earnings on Thursday after the closing bell.
The first trimester of fiscal 2019 ended April 30, 2018. The average analyst predicts a net profit of 26 cents per share. A total of 34 estimates range between a low of 19 cents and a high of 32 cents per share. For the analogous trimester of fiscal 2018, Workday issued earnings per share of 29 cents.
Analysts predict $608.78 million in revenues. That is a nearly 27% growth from the prior-year quarter. The chart below illustrates Workday’s total revenues over the last four quarters:
The chart below illustrates the trend in the company’s revenues and net income over the last five years.
WDAY data by GuruFocus.com
GuruFocus has tracked the company's financials since it was founded. The chart, which is powered by GuruFocus, illustrates the company’s net margin over the last five fiscal years:
Workday has a 12-trailing months net margin of -15%. GuruFocus assigns a profitability and growth rating of 5 out of 10.
For full fiscal 2019, analysts forecast the company will issue a net profit of $1.21 per share, a 17.5% increase year-over-year on revenue of $2.69 per share. In 2018, the company’s turnover stood at $2.14 billion.
In 2020, earnings are projected to grow 35.5% to $1.64 per share on revenues of $3.3 billion. For the next five fiscal years, analysts are projecting an annual growth of nearly 44% in the company’s bottom line.
Financial situation:
After generating cash flow of $465.73 million in full fiscal 2018, the company reported $3.27 billion cash on hand and securities, as of Jan. 31. The total debt outstanding was $1.49 billion. The debt-to-equity ratio is 94% versus an industry median of 27%. An Altman Z-Score Range of 5.24 means that the company is financially in the safe zone. GuruFocus assigns Workday a financial strength rating of 5 out of 10, which means that the company’s financial situation is moderately good. The company doesn’t distribute dividends.
Valuation
The stock is trading at $130.79 per share and a has a market capitalization of $28.14 billion. The share price is up 26% this year and is $38 off the 52-week low of $92.79. The 52-week high is $139.90.
The stock has a price-book ratio of 17.54 versus and industry average of 3.25 times and a price-sales ratio of 12.69 times towards an industry median of 2.57 times.
The forward price-earnings ratio is 107.53 times versus an industry median of 24.04 times. The average target price, a mean of 34 estimates ranging from $93 to $156 per share is $129.18. The recommendation rating is 2.5 out of 5.
(Disclosure: I have no positions in Workday.)
