What Happened?
Shares of finance and HR software company Workday (NASDAQ:WDAY) fell 12.4% in the morning session after the company reported underwhelming third-quarter results. Its billings missed, as the company observed continued deal scrutiny in EMEA. Also, key deals slipped in the quarter, affecting revenue recognition.
Regarding its AI potential, management's comment suggests it is still early days. This may have unsettled some investors who were hoping for more optimistic updates, especially in light of stronger results reported by some SaaS peers.
Guidance also fell slightly short, with Q4 subscription revenue and non-GAAP operating margin missing by a bit. Overall, this quarter was weak, leaving room for improvement.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Workday? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Workday’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for Workday and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 14.4% on the news that the company reported second-quarter earnings results, which beat across the board. Workday observed a macroeconomic environment consistent with last quarter and reiterated full-year FY25 subscription revenue guidance while slightly raising its full-year operating margin outlook. Overall, this was a solid quarter without many surprises, which is often comforting for the market.
Workday is down 5.8% since the beginning of the year, and at $252.97 per share, it is trading 17.7% below its 52-week high of $307.21 from February 2024. Investors who bought $1,000 worth of Workday’s shares 5 years ago would now be looking at an investment worth $1,408.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.
