Shares in Workday fell Friday on April-quarter earnings that missed estimates while revenue edged by views. The enterprise software maker's outlook for WDAY stock came in slightly above expectations.
"Workday delivered more moderate backlog growth than expected, as macro and deal-specific factors shift growth to the second half of fiscal 2023," said BMO Capital Markets analyst Daniel Jester.
He added: "Management sees most deals as delayed, not canceled, and cite improvement in May as supporting evidence. Yet with expectations of a tougher economic backdrop emerging, we expect investor skepticism as to the pace of recovery."
For the three months ended April 30, Workday earnings were 83 cents a share on an adjusted basis, down 4% from the year-earlier period. Revenue climbed 22% to $1.43 billion, including acquisitions.
Analysts expected Workday earnings of 85 cents a share on revenue of $1.425 billion. A year earlier, Workday earnings were 87 cents a share on sales of $1.175 billion.
WDAY stock fell 5.6% to close at 158.79 on the stock market today. Pleasanton, Calif.-based Workday reported fourth-quarter results after the market close on Thursday.
WDAY Stock: Guidance Edges Views
The company said subscription revenue rose 23% to $1.27 billion vs. estimates of $1.26 billion.
For the current quarter ending in July, Workday forecast subscription revenue of $1.354 billion at the midpoint of its guidance, edging by estimates of $1.353 billion.
Thus far in 2022, Workday stock had retreated 39%.
Low Relative Strength Rating
The company sells software for human capital management, such as payroll tools. Also, it has expanded into financial software.
Heading into the Workday earnings report, the software stock owned a Relative Strength Rating of 23 out of a possible 99, according to IBD Stock Checkup.
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