Growth stock Workday is today's selection for IBD 50 Stocks to Watch, as shares behave bullishly. The "Future of Work" stock focuses on innovation technologies to address changing business demands.
The stock is building a flat base with a buy point of 193.74. Workday has a near perfect Composite Rating of 98, while the Relative Strength Rating is also a strong 84.
The workflow management software provider has an unbroken record of sales growth over the past seven quarters, although earnings have been uneven. EPS declined the first three quarters of the fiscal year that ended in January.
However, fourth-quarter performance showed growth in both top and bottom lines. Sales of $1.6 billion grew 20% while earnings per share of 99 cents were up 27% from the previous year. Analysts polled by FactSet expect sales of $1.6 billion and earnings per share of $1.12 in the quarter ending April 30.
The growth stock ranks second in the enterprise software group, which holds 93rd place among IBD's 197 industry groups.
The company offers businesses a unified platform for planning, analyzing, applying and extending to other applications. The software is used for diverse work related operations, from managing finances to planning new business ventures. Future of Work basically means using innovation and technology for business needs.
Targeted 'Future Of Work' Management Software
The Pleasanton, Calif.-based company works with global partners for payroll processes and offers features that allow businesses to operate more effectively. The tools use artificial intelligence and machine learning (AIML) features for several areas such as automating repetitive processes in businesses. Workday's analytics and reporting features also use artificial intelligence to support business decisions.
Workday targets several professional services as well. Its time tracking, project, expense and billing management tools are key product features that professionals use.
Workday Student offers planning and reporting tools for student performance tracking and academic and financial planning.
Workday uses a cloud architecture that allows users to be on the same version at any time and receive updates at the same time. This also means that data is available via the same analytics and visualization tools.
The platform can also be synced with external collaborative tools such as those from Salesforce and Microsoft, namely Slack and Microsoft Teams. The Workday Enterprise Management Cloud Platform also allows businesses to integrate several apps they already use. This can result in better tracking, cost cutting and user experience.
Growth Stock Focuses On Innovation
The company has grown through several acquisitions via Workday Ventures. In February, the enterprise software company invested an additional $250 million in Workday Ventures that seeks innovation technologies for the workplace. The focus areas for the new investment are artificial intelligence and machine learning, intelligent automation and improved management.
In 2021, it acquired Zimit and added certain professional services automation tools to improve sales processes. Zimit's tools allow businesses to predict demand for their services while also providing services pricing and automated proposals.
Mutual funds own 55% of the stock. Exchange traded funds own the stock as well. The Vanguard Information Technology ETF and the iShares US Technology ETF hold shares of Workday.
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