In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Workday WDAY in relation to its major competitors in the Software industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in the industry.
Workday Background
Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known for being a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 18,000 employees.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Workday Inc | 51.75 | 8.81 | 9.85 | 16.16% | $0.24 | $1.46 | 16.75% |
| Salesforce Inc | 72.54 | 4.95 | 8.60 | 2.46% | $2.75 | $7.14 | 10.77% |
| Adobe Inc | 48.53 | 15.71 | 13.56 | 9.18% | $2.06 | $4.41 | 11.56% |
| SAP SE | 57.18 | 4.76 | 6.66 | 3.05% | $2.52 | $6.2 | 5.02% |
| Intuit Inc | 66.91 | 10.85 | 12.30 | 2.08% | $0.6 | $2.53 | 11.34% |
| Synopsys Inc | 61.92 | 12.83 | 14.21 | 7.01% | $0.53 | $1.32 | 21.15% |
| Cadence Design Systems Inc | 80.16 | 24.49 | 20.42 | 9.94% | $0.41 | $0.96 | 18.75% |
| Roper Technologies Inc | 43.13 | 3.37 | 9.55 | 2.26% | $0.72 | $1.13 | 12.76% |
| Autodesk Inc | 61.74 | 29.83 | 10.16 | 16.9% | $0.35 | $1.34 | 3.89% |
| Palantir Technologies Inc | 277.78 | 15.92 | 25.82 | 2.8% | $0.11 | $0.5 | 19.61% |
| Datadog Inc | 882.86 | 20.25 | 20.34 | 2.82% | $0.07 | $0.48 | 25.62% |
| MicroStrategy Inc | 66.84 | 13.84 | 58.95 | 5.93% | $-0.04 | $0.1 | -6.09% |
| Ansys Inc | 57.49 | 5.32 | 12.68 | 5.29% | $0.37 | $0.74 | 15.99% |
| Splunk Inc | 103.06 | 35.65 | 6.52 | 90.8% | $0.47 | $1.26 | 39.24% |
| PTC Inc | 93.81 | 7.91 | 10.19 | 2.42% | $0.16 | $0.44 | 18.09% |
| Zoom Video Communications Inc | 33.07 | 2.63 | 4.66 | 3.87% | $0.2 | $0.87 | 2.56% |
| AppLovin Corp | 64.39 | 16.65 | 6.97 | 14.58% | $0.37 | $0.68 | 35.73% |
| Tyler Technologies Inc | 108.54 | 6.06 | 9.23 | 1.34% | $0.09 | $0.21 | 6.35% |
| Manhattan Associates Inc | 89.24 | 55.68 | 16.97 | 19.96% | $0.06 | $0.13 | 20.27% |
| NICE Ltd | 47.09 | 4.56 | 6.71 | 2.49% | $0.16 | $0.42 | 3.63% |
| Bentley Systems Inc | 48.65 | 16.38 | 13.17 | 22.81% | $0.05 | $0.24 | 8.26% |
| Average | 118.25 | 15.38 | 14.38 | 11.4% | $0.6 | $1.56 | 14.22% |
By analyzing Workday, we can infer the following trends:
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At 51.75, the stock's Price to Earnings ratio is 0.44x less than the industry average, suggesting favorable growth potential.
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Considering a Price to Book ratio of 8.81, which is well below the industry average by 0.57x, the stock may be undervalued based on its book value compared to its peers.
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The Price to Sales ratio is 9.85, which is 0.68x the industry average. This suggests a possible undervaluation based on sales performance.
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The company has a higher Return on Equity (ROE) of 16.16%, which is 4.76% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $240 Million, which is 0.4x below the industry average. This potentially indicates lower profitability or financial challenges.
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The gross profit of $1.46 Billion is 0.94x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 16.75%, outperforming the industry average of 14.22%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In light of the Debt-to-Equity ratio, a comparison between Workday and its top 4 peers reveals the following information:
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When considering the debt-to-equity ratio, Workday exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.41, which can be perceived as a positive aspect by investors.
Key Takeaways
For Workday in the Software industry, its low PE, PB, and PS ratios suggest the company is undervalued compared to its peers. On the other hand, its high ROE and revenue growth indicate strong performance relative to industry standards. However, the low EBITDA and gross profit levels may raise concerns about operational efficiency and profitability compared to competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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