Why Workday, Inc. Shares Surged

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of cloud computing company Workday, Inc. spiked 13% today after its quarterly results and outlook topped Wall Street expectations.

So what: The stock has slumped in recent months on concerns over slowing growth, but a better-than-expected Q4 -- adjusted loss of $0.12 per share beat Wall Street by $0.05 on a revenue spike of 76% -- coupled with upside guidance is quickly easing those worries. In fact, subscription revenue surged 82% year over year, suggesting that the company's new product initiatives are quickly gaining traction.

Now what: Management now expects Q4 revenue of $133 million-$138 million, well above the average analyst estimate of $129.1 million. "We continue to innovate rapidly across all initiatives," said Chairman, co-founder, and co-CEO Aneel Bhusri. "In the third quarter, we announced the availability of Workday Big Data Analytics, confirmed that Workday Recruiting is progressing well and on schedule, and we continued our investment in Workday Financial Management, broadening the scope and scale for the world's largest organizations." Of course, Workday now up about 75% from its 52-week lows and sporting a price-to-sales multiple in the mid 30s, much of that progress might already be baked into the valuation. 

More great growth picks
Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.

The article Why Workday, Inc. Shares Surged originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading