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 similar businesses based on the strength of its dividends, institutional ownership, profitability, analyst recommendations, earnings, risk and valuation.

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 -19.78% -24.07% -9.38%
Workday Competitors -26.09% -104.80% -13.75%

Risk & Volatility

Workday has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500. Comparatively, Workday’s peers have a beta of 3.23, indicating that their average stock price is 223% more volatile than the S&P 500.

Institutional and Insider Ownership

67.6% of Workday shares are held by institutional investors. Comparatively, 70.3% of shares of all “Application Software” companies are held by institutional investors. 37.7% of Workday shares are held by company insiders. Comparatively, 14.8% of shares of all “Application Software” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Workday and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Workday $1.57 billion -$408.27 million -57.22
Workday Competitors $916.05 million $45.64 million 484.63

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 current ratings and target prices for Workday and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Workday 4 21 13 0 2.24
Workday Competitors 178 1502 2844 89 2.62

Workday presently has a consensus target price of $102.98, suggesting a potential downside of 0.02%. As a group, “Application Software” companies have a potential upside of 12.63%. Given Workday’s peers stronger consensus rating and higher possible upside, analysts clearly believe Workday has less favorable growth aspects than its peers.

Summary

Workday peers beat Workday on 7 of the 12 factors compared.

Workday Company Profile

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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