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Comparing Workday’s Valuations with Its Peers

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Aug. 31 2018, Updated 10:30 a.m. ET

Peer comparisons based on market cap

On August 16, Workday’s (WDAY) market capitalization stood at $30.1 billion. Among its peers, Automatic Data Processing (ADP), ServiceNow (NOW), and Splunk (SPLK) reported market cap figures of $61.9 billion, $32.4 billion, and $15.1 billion, respectively.

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Workday’s valuation metrics

On August 16, Workday was trading at a forward EV-to-sales multiple of ~9.25x. Automatic Data Processing, ServiceNow, and Splunk had forward EV-to-sales multiples of ~4.31x, 10.07x, and ~7.47x, respectively.

On August 16, Workday was trading at a forward PE (price-to-earnings) multiple of ~90.5x. On the same date, Automatic Data Processing, ServiceNow, and Splunk had forward PE multiples of ~26.64x, 63.49x, and ~76.51x, respectively.

Bollinger Band

In the August 17 trading session, Workday stock closed at $140.05, close to its lower Bollinger Band level of $123.89. This value indicates that the stock is oversold, and investors could take it as a “buy” signal.

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Short interest ratio

On August 16, Workday stock’s short interest as a percentage of its shares outstanding (or short interest ratio) was ~6.2%. Generally, a stock’s short interest ratio that’s greater than 40.0% implies that investors and traders expect the stock price of that company to decline.

Historical stock returns

In the last year, Workday stock has gained 31.9%. In the last month, its stock has risen 5.4%. Workday’s stock price has risen 5.9% in the last five days. The 200-day moving average for Workday stock is $122.42.

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