Shares of Workday (WDAY) gained in after-hours trading after the software company reported earnings for its second quarter of Fiscal Year 2024. Earnings per share came in at $1.75, which beat analysts’ consensus estimate of $1.66 per share. It is also worth noting that WDAY has beaten earnings estimates for nine consecutive quarters.
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In addition, sales increased by 16.2% year-over-year, with revenue hitting $2.08 billion and subscriptions making up $1.9 billion of the total. This beat analysts’ expectations of $2.072 billion.
When discussing the macroeconomic environment, CFO Zane Rowe noted that it was consistent with the previous quarter, which is why the company reiterated its revenue guidance. However, it did slightly boost its expectation for non-GAAP operating margin. Indeed, management now expects subscription revenue for FY 2025 to be between $7.7 billion and $7.725 billion, with a non-GAAP operating margin of 25.25%.
Is Workday a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WDAY stock based on 22 Buys, nine Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 16% year-to-date loss, the average WDAY price target of $287.73 per share implies 24.52% upside potential.
