Workday: Buy The Pullback
Summary
If Workday is unable to convince large enterprise customers to switch over to its solutions, they might experience lower sales growth in the next few years. However, if Oracle and SAP are able to develop innovative cloud HCM and FM solutions, Workday might have to provide some incentive for customers to switch over especially in its international segment. However, once the company achieves profitability and higher free cash flows, the risk should be reduced as reflected in the lower cost of capital. Compared to established peers like Oracle, SAP and Automatic Data Processing (NASDAQ: ADP), Workday is very expensive on both Price/Sales and EV/Sales multiples. Workday is fairly priced when compared to Paylocity (NASDAQ: PCTY), which have lower sales growth but is a profitable HCM company.
Classifications
AskAI Classifications
LabelsLinked Companies
