Workday Stock Could Be 31.7% Undervalued as AI Growth Narrative Faces Market Test

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โดย Simply Wall St·Read original
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Workday shares may be undervalued by 31.7% relative to a fair value estimate of $171.14, even as the stock has fallen 43.18% year to date and 50.91% over the past year. The last close was $116.93, and the most widely followed narrative frames the pullback as a sizable discount that depends on how the company's earnings and AI-driven growth story unfold. Broad adoption of AI-enabled HR and finance products, with more than 70% of customers using Workday Illuminate and over 75% of net new deals including at least one AI product, along with acquisitions like Paradox and Flowise, is fueling cross-sell and upsell activity that increases average contract values and supports future topline growth. However, a simpler price-based check shows the stock trading at a P/E of 34.1 times, above the peer average of 23.3 times and the US software industry average of 25.5 times, though still below its estimated fair ratio of 37.4 times. Risks include faster-moving AI rivals pressuring pricing or higher compliance and investment costs squeezing margins more than expected.

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Workday Inc
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Article states Workday is 31.7% undervalued relative to fair value estimate, implying upside potential.

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