• Sun. May 26th, 2024

Will Solid Top-Line Growth Buoy Workday’s (WDAY) Q1 Earnings?

Workday, Inc. WDAY is scheduled to report first-quarter fiscal 2024 results on May 25, after the market closes. In the last reported quarter, the company delivered an earnings surprise of 11.2%. It pulled off a trailing four-quarter earnings surprise of 7.7%, on average.

The Pleasanton, CA-based firm is likely to have recorded higher revenues in the fiscal first quarter on a year-over-year basis, driven by its approach of continuous innovation and healthy demand for its applications for finance and human resources.

Factors at Play

In the fiscal first quarter, The Amenity Collective deployed a bevy of Workday solutions to break down data silos and drive efficiencies to accelerate its business transformation. These included Workday Financial Management, Workday Human Capital Management, Workday Payroll and Workday Learning. The transition to a cloud-based system to unify the lifestyle services and hospitality firm’s data into a single platform and drive front and back-office operations across the full breadth of the businesses is likely to have generated incremental revenues for Workday in the quarter.

During the to-be-reported quarter, EZCORP, Inc. selected several Workday solutions to improve its real-time visibility into costs and revenue drivers. These included Workday Financial Management, Workday Human Capital Management, Workday Adaptive Planning, Workday Strategic Sourcing and Workday Accounting Center. The solutions are likely to have helped the leading provider of pawn transactions to fast-track its digital transformation efforts for improved decision-making. This is likely to be reflected in the upcoming quarterly results.

For the April quarter, the Zacks Consensus Estimate for revenues is pegged at $1,675 million, which indicates growth from the year-ago quarter’s reported figure of $1,435 million. The consensus estimate for adjusted earnings per share is pegged at $1.10, suggesting an increase from 83 cents reported in the prior year.

Earnings Whispers

Our proven model does not predict an earnings beat for Workday for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -9.49%, with the former pegged at $1.00 and the latter at $1.10. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Workday, Inc. Price and EPS Surprise

Workday, Inc. Price and EPS Surprise

Workday, Inc. price-eps-surprise | Workday, Inc. Quote

Zacks Rank: Workday currently has a Zacks Rank #2.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

HP Inc. HPQ is set to release quarterly numbers on May 30. It has an Earnings ESP of +2.29% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Agilent Technologies, Inc. A is +0.40% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on May 23.

The Earnings ESP for Jabil Inc. JBL is +3.38% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jun 15.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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HP Inc. (HPQ) : Free Stock Analysis Report

Agilent Technologies, Inc. (A) : Free Stock Analysis Report

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Workday, Inc. (WDAY) : Free Stock Analysis Report

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