WDAY
Workday, Inc.
Technology · Software - Application · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The growth factor scored well, supported by double-digit revenue growth and earnings expanding at roughly 2.5 times the rate of revenue, while the momentum factor also scored strongly on consistent quarterly revenue gains and a sharp operating income rebound.
- Profitability was constrained by single-digit net and operating margins, limiting that factor's contribution to the composite.
- The absence of a dividend and a zero score on the Enterprise AI Software macro theme both weighed on the composite, contributing to the total model score of 49.1/100.
Why Not Higher
- Single-digit margins — net margin of 7.3% and operating margin of 7.5% in FY2026 — kept the profitability factor score modest, preventing a higher composite.
- Scoring zero on both the dividend factor (confirmed non-payer) and the macro theme factor (Enterprise AI Software designation did not translate into a positive score) structurally limited the total score.
Data Confidence
8 / 10
High — most data fields present
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2025's $8,446,000,000 to FY2026's $9,552,000,000 (+13.1%), while net income rose from FY2025's $526,000,000 to FY2026's $693,000,000 (+31.7%), and diluted EPS expanded from FY2025's $1.95 to FY2026's $2.59 (+32.8%).
The model rewarded the combination of double-digit top-line expansion and accelerating bottom-line growth, with earnings and EPS growing at roughly 2.5 times the rate of revenue, signaling improving operating leverage.
In FY2026, Workday posted a net margin of 7.3%, an operating margin of 7.5%, and a return on assets of 3.8%.
While the company is profitable, these single-digit margin and return figures indicate that profitability remains modest relative to the thresholds the model uses to award higher scores, limiting this factor's contribution.
Filing evidence currently available does not support a more specific explanation for this factor.
Revenue showed steady sequential growth across the last four quarters: $2,348,000,000 in 2026Q2, $2,432,000,000 in 2026Q3, $2,532,000,000 in 2026Q4, and $2,542,000,000 in 2027Q1. Operating income dipped to $175,000,000 in 2026Q4 before rebounding sharply to $338,000,000 in 2027Q1, the highest level in the four-quarter window.
The model rewarded the consistent upward revenue trend and the strong operating income recovery in 2027Q1, which together signal positive near-term business momentum despite a temporary earnings dip in 2026Q4.
Workday does not currently pay a dividend; this is a genuine characteristic of the company, not a data limitation.
Because the model rewards dividend income and yield history, a confirmed non-payer receives a score of zero on this factor, reflecting the absence of any dividend distribution rather than any judgment about overall company quality.
Workday is assigned to the Enterprise AI Software macro theme.
Although the company carries the Enterprise AI Software theme assignment, this designation did not translate into a positive score under the model's current methodology; the theme assignment itself remains a factual characteristic of the security regardless of the score outcome.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Workday delivered strong top-line and bottom-line growth in FY2026, with revenue rising 13.1% to $9,552,000,000 and net income climbing 31.7% to $693,000,000, reflecting meaningful operating leverage as earnings grew at roughly 2.5 times the rate of revenue. Quarterly momentum has been consistent, with revenue advancing each period and operating income rebounding sharply to $338,000,000 in 2027Q1 after a temporary dip. However, single-digit net and operating margins of 7.3% and 7.5% respectively, the absence of any dividend, and a zero score on the Enterprise AI Software macro theme together weigh on the composite, producing a total model score of 49.1/100 and a Medium risk rating. The overall label is Research Further.
Plain English
Workday is growing its revenue and profits steadily — earnings are rising much faster than sales, which is a good sign — but its profit margins are still thin, it pays no dividend, and its AI theme label didn't boost its score, so the model says it's worth looking into more before drawing conclusions.
Bull Case vs. Bear Case
Bull Case
- Revenue grew 13.1% year-over-year to $9,552,000,000 in FY2026, while net income rose 31.7% to $693,000,000 and diluted EPS expanded 32.8% to $2.59, demonstrating that earnings are scaling faster than the top line.
- Quarterly revenue has risen consistently across the last four reported periods — from $2,348,000,000 in 2026Q2 to $2,542,000,000 in 2027Q1 — and operating income rebounded sharply to $338,000,000 in 2027Q1, the highest level in the four-quarter window.
- The combination of accelerating bottom-line growth and steady sequential revenue gains signals improving operating leverage that could support further margin expansion over time.
Bear Case
- Net margin of 7.3% and operating margin of 7.5% in FY2026 remain in single-digit territory, indicating that profitability is still modest relative to the thresholds the model uses to award higher scores.
- Workday pays no dividend and is a confirmed non-payer, which means it scores zero on the dividend factor, weighing on the composite score.
- Despite being assigned to the Enterprise AI Software macro theme, this designation did not translate into a positive score under the model's current methodology, further limiting the composite.
What Could Change the Picture
Bullish Triggers
- A sustained expansion of net and operating margins beyond single-digit levels would directly address the profitability gap that currently limits the factor score.
- Continued acceleration in operating income growth — building on the sharp rebound to $338,000,000 in 2027Q1 — would reinforce the operating leverage narrative and could improve the composite score.
Bearish Triggers
- A reversal of the recent operating income recovery — similar to the dip to $175,000,000 seen in 2026Q4 — would undermine the momentum thesis and raise questions about earnings consistency.
- If revenue growth decelerates from its current 13.1% annual pace, the case for improving operating leverage would weaken, putting further pressure on already thin margins.
Risk Profile
Medium RiskWorkday's interest coverage ratio of 6.3 in FY2026 suggests the company can service its debt obligations, but the temporary dip in operating income to $175,000,000 in 2026Q4 before rebounding to $338,000,000 in 2027Q1 illustrates that quarterly earnings can be volatile, which is a factor investors should monitor.
Key Catalysts to Watch
The sharp rebound in operating income to $338,000,000 in 2027Q1 — the highest level in the four-quarter window — could signal an inflection point in operating leverage if the trend is sustained.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.