Workday (NASDAQ:WDAY) has reported its second-quarter earnings, revealing a robust performance with earnings of $1.43 per share. This surpasses the earlier projected figure of $1.25 per share as estimated by Zacks Consensus. In comparison to the previous year’s earnings of $0.83 per share, this showcases substantial growth. These numbers are adjusted to account for non-recurring items.
This quarterly outcome indicates an impressive earnings surprise of 14.40%. Looking back to the previous quarter, Workday was anticipated to achieve earnings of $1.11 per share, but instead achieved $1.31 per share, presenting an unexpected positive variance of 18.02%.
Throughout the past year, Workday has consistently outperformed consensus EPS estimates, achieving this feat on four separate occasions.
Workday has generated revenues of $1.79 billion for the quarter concluding in July 2023. This figure not only surpasses the Zacks Consensus Estimate by 0.76% but also indicates growth from the previous year’s revenue of $1.54 billion. Workday has managed to exceed consensus revenue estimates for four consecutive quarters.
Ascertaining the immediate trajectory of the stock’s price will significantly rely on management’s remarks during the earnings call, considering the freshly disclosed financial data and future earnings projections.
In the year-to-date period, Workday’s shares have appreciated by approximately 37.6%, a notably higher gain compared to the S&P 500’s increase of 15.5%.
The Path Ahead for Workday
While Workday’s performance has been impressive so far this year, investors are contemplating the company’s future trajectory. Predicting the future for any stock is complex, but a dependable gauge to address this concern is the company’s earnings outlook. This encompasses not only the prevailing consensus earnings forecasts for the upcoming quarters but also the recent alterations in these projections.
Historical evidence underscores a substantial correlation between short-term stock movements and trends in revisions of earnings estimates. Investors have the option to monitor these revisions independently or rely on established evaluation tools like the Zacks Rank, renowned for its ability to harness the impact of earnings estimate changes.
Before this earnings disclosure, the trend in estimate revisions for Workday is favorable. While the nature and extent of these revisions might shift following the newly announced earnings report, the present status translates to a Zacks Rank #1 (Strong Buy) for the stock. Hence, the outlook suggests that the shares are poised to outperform the market in the immediate future. Monitoring how estimates for the forthcoming quarters and the current fiscal year evolve in the upcoming days will be intriguing. The present consensus EPS estimate stands at $1.33 on revenues of $1.84 billion for the approaching quarter, and $5.32 on revenues of $7.17 billion for the ongoing fiscal year.
Investors should remain cognizant of the fact that the industry’s outlook can exert a notable influence on the stock’s performance. Another player in the same industry, GitLab Inc. (NASDAQ:GTLB), is yet to unveil its results for the quarter concluding in July 2023. The outcome is anticipated to be made public on September 5.
Forecasts indicate that the company is likely to report a quarterly loss of $0.03 per share in its impending report, marking an impressive year-over-year shift of +80%. The consensus EPS estimate for the quarter has remained unchanged over the past 30 days.
Anticipations for GitLab Inc.’s revenues stand at $129.67 million, reflecting a growth of 28.3% compared to the same quarter in the previous year.
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