As the curtain rises on $Workday(WDAY)$ Q4/24 financial results, investors brace themselves for insights into the performance of this finance and HR software company. Set to unveil its numbers today after market close, Workday presents an intriguing narrative, with current Street estimates projecting $1.47 for EPS and $1.92 billion for revenues.
Workday has established a commendable track record of surpassing both EPS and revenue predictions over the past six quarters, instilling confidence in its ability to outperform expectations. With a history of beating revenue estimates by an average of 0.9% over the last two years, Workday has consistently demonstrated resilience in the face of market expectations.
Analysts are eyeing a 16.4% year-over-year growth in revenue to $1.92 billion, a slight deceleration from the 19.6% increase recorded in the same quarter last year. Adjusted earnings are anticipated to reach $1.47 per share. While the majority of analysts have reconfirmed their estimates, suggesting a steady course for the business, the market awaits confirmation from Workday itself.
Taking a peek at Workday's peers in the finance and HR software segment provides additional context. $BILL HOLDINGS INC(BILL)$ and $Paycor HCM, Inc.(PYCR)$, both players in the industry, reported robust Q4 earnings results. Bill.com showcased a 22.5% year-on-year growth, exceeding estimates by 6.8%, while Paycor reported a 20.1% increase, surpassing estimates by 2.4%. However, things have been challenging for the sector, with share prices facing pressure due to broader economic factors.
WDAY Daily Chart
From a technical standpoint, Workday's stock is currently trading around its previous all-time high (ATH) at 307.81 in 2021. Although the ATH was breached intraday, it has yet to close above it. The price action is consolidating into a rising wedge pattern, a potentially bearish signal. As the earnings report looms, this could act as a trigger for a significant move in either direction.
WDAY Investing Models
Workday's stock has demonstrated resilience amid recent market pressures, gaining 3% over the last month. Analysts maintain a price target of $301.1, slightly below the current share price of $305.7. However, estimated fair value suggests a 9% downside from the current price, indicating a potential overvaluation.
Investors and traders alike are presented with a critical juncture. The earnings report might serve as a catalyst for Workday's stock, with the technical setup signaling a potential breakout. Those keen on capturing the potential big move may consider keeping a watchful eye on the earnings results or positioning strategically before the announcement. Personally I am looking to open a options spread trade today if I see opportunity during the market hours.
In conclusion, Workday's Q4 earnings report carries implications not just for the company but for the broader finance and HR software sector. As investors navigate the intricacies of market sentiment, technical patterns, and analyst expectations, Workday's performance will undoubtedly be under the spotlight. The earnings report could set the stage for a pivotal move, offering opportunities for those astute enough to decipher the signals.
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How do you interpret the technical analysis on Workday? Are you anticipating a bullish or bearish move post-earnings?
Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Always conduct your research before making investment decisions.
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