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$Workday(WDAY)$ 

🙀😓🥿Workday Woes or Wins? The Scoop on WDAY 🥿🙀😓

Let’s talk about Workday (WDAY) and see if it’s a stock worth considering. Here’s the lowdown:

Current Vibes:

• Premarket Price: $210.90 (-0.32%)

• Yesterday’s Close: $211.58 (-1.79%)

What the Experts are Saying:

1. Earnings Drama:

Imagine you’re excited for a big concert, but then the main act cancels. That’s what happened with Workday’s earnings report. The stock had a big price run-up, but the earnings report didn’t meet expectations, leading to disappointment. The lesson here? Be careful about holding onto stocks through earnings reports—they can be unpredictable.

2. Long-Term Performance:

If you bought Workday five years ago and held onto it, your investment wouldn’t have grown. It’s been flat, meaning the stock price hasn’t really increased over time. This might mean the company has had trouble growing steadily.

3. Founder’s Influence:

Workday’s co-founders, Aneel Bhusri and Dave Duffield, have significant influence over the company, though not individually owning 60% of the voting power. Their leadership and decisions play a crucial role in the company’s direction. For instance, past actions like using company funds for personal expenses have raised questions about governance.

4. Financial Practices:

• ARR Growth: The company’s annual recurring revenue (ARR) is growing at a moderate rate, which is good but not amazing.

• Stock-Based Compensation (SBC): Workday spends 20% of its revenue on stock-based compensation for employees. While this can motivate employees, it also means your shares could be diluted.

• Adjusted EBIT: A big chunk of their adjusted earnings before interest and taxes (EBIT) comes from SBC, which can make profits look bigger than they actually are.

• Commission Costs: They spread out commission expenses over five years, which can make short-term finances look better but might hide some costs.

• R&D Spending: They spend one-third of their revenue on research and development, which is great for future growth but also costly.

New Insights:

• Market Position and Competition: Workday competes with giants like SAP and Oracle in the enterprise software market. Their focus on cloud-based solutions gives them an edge in innovation but also puts them in a tough competitive landscape.

• Customer Base: Workday serves many large enterprises, providing critical software for HR and finance. Their ability to retain and grow this customer base is key to their success.

• Sustainability Initiatives: Workday has committed to sustainability, aiming for net-zero carbon emissions by 2023. This focus on sustainability can attract socially conscious investors and clients.

The Verdict:

Workday is a mixed bag. They invest heavily in innovation and have solid revenue growth, but there are concerns about how the company is managed and its financial practices. If you’re considering investing, keep an eye on these factors and stay informed.

So, is WDAY a gem or a woe? Only time will tell, so watch it grow Sloth slow.

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