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Analyst: WDAY stock troubles are a buying opportunity

By Monte Stewart


The Workday website provides access to an array of computerised personnel services
US human-resources software company Workdays stock troubles are a buying opportunity, according to a leading analyst. - Photo: Shutterstock

US human resources, finance and planning software solutions company Workday is poised for revenue growth despite its stock-price troubles, according to a leading analyst.

The company's stock price took a hit for the second straight day Friday. The Pleasanton, California-based company closed down 4.18%, or $12.49, at $286.60 on the Nasdaq Global Select Market a day after descending more than 9% in after-hours trading, before recovering slightly.

Workday designs and sells human resources, finance and planning software offering different subscription plans to companies for things like payroll administration and job assignment tracking. 

“We think the -8% (after-hours) sell-off is an over-reaction (and) view the pullback as a buying opportunity,” wrote Cowen & Company's Derrick Wood in a research report that he provided to

Earnings report sparked stock troubles

Workday’s stock troubles began after the company delivered a strong quarterly report, but its adjusted earnings per share of 17 cents fall well short of the 87 cents anticipated from analysts polled by Dow Jones.

However, Wood was not concerned.

He wrote that Workday’s 24% increase in new subscribers to its services was higher than Cowen’s estimated 21% rise and an “acceleration” from the 18% boost achieved in the first half of the fiscal year. (For accounting purposes, the latest reporting period served as Workday’s third quarter of 2022.)


0.67 Price
-0.380% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


16,080.90 Price
+0.500% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 7.0

Oil - Crude

71.41 Price
+2.320% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee -0.0015%
Overnight fee time 22:00 (UTC)
Spread 0.030


44,001.35 Price
-1.360% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

Backlog headwind slowing second-half bookings

Wood was buoyed by the fact that Workday’s projected 21% fourth-quarter subscription revenue increase ranging from $1.216bn (£.90bn) to $1.218bn was higher than Cowen’s estimated 19% boost. He was also glad to see that Workday projected 19.5% backlog growth over the next 24 months compared to Cowen’s 19.3% estimate.

Wood also wrote that Workday nudged its anticipated fiscal-year 2022 subscription revenue increase up 1% to 20%  – after only projecting a 16% jump at the beginning of the year – and the company expects to boost subscription revenue 20% again in fiscal-year 2023.

“We see strengthening macro drivers, a more effective (go-to-market) model, and an expanded product portfolio all creating stronger growth levers into (calendar-year) 2022,” Wood wrote.


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The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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