Workday Inc. (WDAY) Volatility Spurs A Quest For Clarity

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    The Vanguard Group, Inc. recently announced the acquisition of new stake in Workday Inc. (NASDAQ:WDAY). The institutional investor has increased its shareholding in the Technology company by 4.16% to 10.27 million shares with purchase of 0.41 million shares. This fresh investment now brings its stake to 5.90% valued currently at $1.86 billion. In addition, Baillie Gifford & Co. raised its holdings by 1.56 million to 8.61 million shares. And Wellington Management Co. LLP has lifted its position by 19.01% or 1.35 million shares – to 8.47 million shares.

    With over 11.24 million Workday Inc. (WDAY) shares trading Friday and a closing price of $243.88 on the day, the dollar volume was approximately $2.74 billion. The shares have shown a positive weekly performance of 26.59% and its price on 08/28/20 gained nearly 12.58%. Currently, there are 232.94M common shares owned by the public and among those 172.25M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 33 analysts who have offered their price forecasts for WDAY have a consensus price objective of $244.00. The analysts have set the share’s price value over the next 12 months at a high of $296.00 and a low of $165.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Workday Inc. stock is 2.40 for the next 12 months. The average price target is -27.15% below its last price level and a downside to the estimated low will see the stock lose -47.81% over that period. But an upside of 17.61% will see the stock hit the forecast high price target while mean target price for the stock is $249.00.

    Insiders at the company have transacted a total of 237 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 35 of these insider trades were purchases, accounting for 4,725,287 shares. Insider sales of the common stock occurred on 202 occasions, with total insider shares sold totaling 4,825,327 shares.

    The top 3 mutual fund holders in Workday Inc. are Vanguard Total Stock Market Index, T Rowe Price Blue Chip Growth Fun, and Morgan Stanley Invt. Fds. – US Ad. Vanguard Total Stock Market Index owns 4.95 million shares of the company’s stock, all valued at over $895.52 million. The company sold 8068.0 shares recently to bring their total holdings to about 2.85% of the shares outstanding. T Rowe Price Blue Chip Growth Fun sold -0.64 million shares to see its total holdings shrink to 3.68 million shares valued at over $666.21 million and representing 2.12% of the shares outstanding. Morgan Stanley Invt. Fds. – US Ad bought 0.38 million shares to bring its total holdings to over 2.61 million shares at a value of $473.0 million. Morgan Stanley Invt. Fds. – US Ad now owns shares totaling to 1.50% of the shares outstanding.

    Shares of Workday Inc. (NASDAQ: WDAY) opened at $240.00, up $23.37 from a prior closing price of $216.63. However, the script later closed the day at $243.88, up 12.58%. The company’s stock has a 5-day price change of 26.59% and 37.04% over the past three months. WDAY shares are trading 48.30% year to date (YTD), with the 12-month market performance up to 29.97% higher. It has a 12-month low price of $107.75 and touched a high of $219.29 over the same period. Currently, 11.24 million shares have been traded, compared to an average intraday trading volume of 1.85 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 29.65%, 30.12%, and 43.44% respectively.

    Institutional ownership of Workday Inc. (NASDAQ: WDAY) shares accounts for 93.90% of the company’s 232.94M shares outstanding. Mutual fund holders own 46.08%, while other institutional holders and individual stakeholders account for 47.61% and 2.82% respectively.

    It has a market capitalization of $50.91B and a beta (3y monthly) value of 1.48. The earnings-per-share (ttm) stands at -$2.28. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.38% over the week and 3.12% over the month.

    Analysts forecast that Workday Inc. (WDAY) will achieve an EPS of $0.66 for the current quarter, $0.57 for the next quarter and $2.88 for 2022. The lowest estimate earnings-per-share for the quarter is $0.54 while analysts give the company a high EPS estimate of $0.71. Comparatively, EPS for the current quarter was $0.53 a year ago. Earnings per share for the fiscal year are expected to decrease by -9.70%, and 16.71% over the next financial year. EPS should grow at an annualized rate of 23.35% over the next five years, compared to -9.40% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 33 brokerage firm advisors rate Workday Inc. (WDAY) as a “Moderate Buy” at a consensus score of 2.40. Specifically, 14 Wall Street analysts polled rate the stock as a buy, while 12 of the 33 advise that investors “hold,” and 3 rated it as a “Sell.”

    Looking at the support for the WDAY, a number of firms have released research notes about the stock. Wells Fargo stated their Equal Weight rating for the stock in a research note on August 28, 2020, with the firm’s price target at $195-$240. UBS coverage for the Workday Inc. (WDAY) stock in a research note released on August 28, 2020 offered a Sell rating with a price target of $175. Stifel was of a view on August 28, 2020 that the stock is Hold, while RBC Capital Mkts gave the stock Outperform rating on August 28, 2020, issuing a price target of $220- $280. Piper Sandler on their part issued Neutral rating on August 28, 2020.

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