Workday (NASDAQ: WDAY) is one of 61 publicly-traded companies in the “Application Software” industry, but how does it contrast to its peers? We will compare Workday to related companies based on the strength of its analyst recommendations, institutional ownership, dividends, valuation, earnings, profitability and risk.

Volatility and Risk

Workday has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500. Comparatively, Workday’s peers have a beta of 0.55, meaning that their average stock price is 45% less volatile than the S&P 500.

Profitability

This table compares Workday and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Workday -16.91% -19.73% -7.37%
Workday Competitors -26.59% -292.04% -15.16%

Insider and Institutional Ownership

67.6% of Workday shares are owned by institutional investors. Comparatively, 70.5% of shares of all “Application Software” companies are owned by institutional investors. 37.7% of Workday shares are owned by company insiders. Comparatively, 15.4% of shares of all “Application Software” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Workday and its peers top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Workday $1.57 billion -$408.27 million -63.91
Workday Competitors $916.05 million $45.64 million 558.04

Workday has higher revenue, but lower earnings than its peers. Workday is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Workday and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Workday 3 21 12 0 2.25
Workday Competitors 179 1514 2857 90 2.62

Workday currently has a consensus target price of $103.62, indicating a potential downside of 1.14%. As a group, “Application Software” companies have a potential upside of 13.02%. Given Workday’s peers stronger consensus rating and higher probable upside, analysts clearly believe Workday has less favorable growth aspects than its peers.

About Workday

Workday, Inc. is a provider of enterprise cloud applications for finance and human resources. The Company delivers financial management, human capital management and analytics applications designed for various companies, educational institutions and government agencies. As part of its applications, the Company provides embedded analytics that capture the content and context of everyday business events, facilitating informed decision-making from wherever users are working. Its applications include Workday Financial Management, Workday Human Capital Management (HCM) and Other Applications. It also provides open, standards-based Web-services application programming interfaces, and pre-built packaged integrations and connectors. Workday Financial Management is a unified application with a range of financial capabilities, relevant analytics and metrics, and auditable process management. Workday HCM allows an organization to staff, pay, organize and develop its global workforce.

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