Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cloud-based HR software maker Workday (NYS: WDAY) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Workday's business and see what CAPS investors are saying about the stock right now.
Pleasanton, Calif. (2005)
Co-Founder/Chairman/Co-CEO Aneel Bhusri
Trailing-12-Month Operating Margin
$122.7 million / $16.1 million
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 79% of the 33 members who have rated Workday believe the stock will underperform the S&P 500 going forward.
I think the market is overpricing just about everything that has to do with [Software-as-a-Service]. Yes, these are the business solutions of the present/future. But the valuations need to be in line with revenue.
I'm getting a little concerned about (what I see as) a growing bubble around the SaaS space. [Workday] appears to have benefited from this positivity in the market, and that's great for the original founders and investors.
I'll be curious to see how David Duffield and Aneel Bhusri manage their growth. There's some legacy success with PeopleSoft that I find intriguing. ...
The [70% IPO pop] worries me, and I think in the long run, we'll see some corrections in the SaaS valuations. This includes [Workday].
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The article 1-Star IPOs Poised to Plunge: Workday? originally appeared on Fool.com.
Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Oracle. Motley Fool newsletter services recommend Automatic Data Processing. 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.