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Inquiry Into Workday's Competitor Dynamics In Software Industry
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Inquiry Into Workday's Competitor Dynamics In Software Industry
Mar 14, 2024 9:24 AM

In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Workday in relation to its major competitors in the Software industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in the industry.

Workday Background

Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known for being a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 18,000 employees.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Workday Inc ( WDAY ) 51.75 8.81 9.85 16.16% $0.24 $1.46 16.75%
Salesforce Inc 72.54 4.95 8.60 2.46% $2.75 $7.14 10.77%
Adobe Inc 48.53 15.71 13.56 9.18% $2.06 $4.41 11.56%
SAP SE 57.18 4.76 6.66 3.05% $2.52 $6.2 5.02%
Intuit Inc 66.91 10.85 12.30 2.08% $0.6 $2.53 11.34%
Synopsys Inc 61.92 12.83 14.21 7.01% $0.53 $1.32 21.15%
Cadence Design Systems Inc 80.16 24.49 20.42 9.94% $0.41 $0.96 18.75%
Roper Technologies Inc 43.13 3.37 9.55 2.26% $0.72 $1.13 12.76%
Autodesk Inc 61.74 29.83 10.16 16.9% $0.35 $1.34 3.89%
Palantir Technologies Inc 277.78 15.92 25.82 2.8% $0.11 $0.5 19.61%
Datadog Inc 882.86 20.25 20.34 2.82% $0.07 $0.48 25.62%
MicroStrategy Inc 66.84 13.84 58.95 5.93% $-0.04 $0.1 -6.09%
Ansys Inc 57.49 5.32 12.68 5.29% $0.37 $0.74 15.99%
Splunk Inc 103.06 35.65 6.52 90.8% $0.47 $1.26 39.24%
PTC Inc 93.81 7.91 10.19 2.42% $0.16 $0.44 18.09%
Zoom Video Communications Inc 33.07 2.63 4.66 3.87% $0.2 $0.87 2.56%
AppLovin Corp 64.39 16.65 6.97 14.58% $0.37 $0.68 35.73%
Tyler Technologies Inc 108.54 6.06 9.23 1.34% $0.09 $0.21 6.35%
Manhattan Associates Inc 89.24 55.68 16.97 19.96% $0.06 $0.13 20.27%
NICE Ltd 47.09 4.56 6.71 2.49% $0.16 $0.42 3.63%
Bentley Systems Inc 48.65 16.38 13.17 22.81% $0.05 $0.24 8.26%
Average 118.25 15.38 14.38 11.4% $0.6 $1.56 14.22%

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By analyzing Workday, we can infer the following trends:

At 51.75, the stock's Price to Earnings ratio is 0.44x less than the industry average, suggesting favorable growth potential.

Considering a Price to Book ratio of 8.81, which is well below the industry average by 0.57x, the stock may be undervalued based on its book value compared to its peers.

The Price to Sales ratio is 9.85, which is 0.68x the industry average. This suggests a possible undervaluation based on sales performance.

The company has a higher Return on Equity (ROE) of 16.16%, which is 4.76% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $240 Million, which is 0.4x below the industry average. This potentially indicates lower profitability or financial challenges.

The gross profit of $1.46 Billion is 0.94x below that of its industry, suggesting potential lower revenue after accounting for production costs.

The company is experiencing remarkable revenue growth, with a rate of 16.75%, outperforming the industry average of 14.22%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

In light of the Debt-to-Equity ratio, a comparison between Workday and its top 4 peers reveals the following information:

When considering the debt-to-equity ratio, Workday exhibits a stronger financial position compared to its top 4 peers.

This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.41, which can be perceived as a positive aspect by investors.

Key Takeaways

For Workday in the Software industry, its low PE, PB, and PS ratios suggest the company is undervalued compared to its peers. On the other hand, its high ROE and revenue growth indicate strong performance relative to industry standards. However, the low EBITDA and gross profit levels may raise concerns about operational efficiency and profitability compared to competitors.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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