Workday Inc. shares surged 30% on Aug. 13, a sharp single-day move for the human-resources software maker ahead of its fiscal second-quarter earnings due Aug. 27. Analysts expect EPS of $2.63, up 19 percent year over year, on revenue of $2.63 billion, a 12.2 percent increase, per the Zacks Consensus Estimate.
Workday Inc. shares surged 30% on Aug. 13, extending gains as traders positioned ahead of the human-resources software maker's fiscal second-quarter earnings due Aug. 27.
The jump came with no confirmed single driver, though traders pointed to three possibilities: acquisition speculation, a strategic partnership, or a strong earnings preview. The company reports results in two weeks, where analysts expect earnings of $2.63 per share, up 19 percent from a year earlier, on revenue of $2.63 billion, a 12.2 percent increase, according to the Zacks Consensus Estimate.
The consensus EPS estimate has been revised 1.1 percent higher over the past 30 days, pointing to improving expectations into the print. Workday, which makes human-resources and financial-management software, sits in an Internet-Software industry that ranks in the top 42 percent of the more than 250 Zacks-ranked industries; research shows the top half of ranked industries outperform the bottom half by a factor of more than 2 to 1.
The 30 percent jump far outpaced the S&P 500, which has gained 13.3 percent year to date, while peer CI&T Inc. has lost 10.8 percent over the same period. The move lifts Workday's valuation ahead of a report that will test whether the surge is justified, with investors focused on subscription revenue growth and guidance when management reports on Aug. 27. A strong print would support the re-rating and could lift sentiment across enterprise software peers, while a miss would leave the stock exposed after such a sharp run.
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