Software - Application · NASDAQ
Current Price
$122.43
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Workday, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Workday, Inc. provides enterprise cloud applications in the United States and internationally. The company's applications help its customers to plan, execute, analyze, and extend to other applications and environments, and to manage their business and operations. It offers a suite of financial management applications, which enable chief financial officers to maintain accounting information in the general ledger; manage financial processes; identify real-time financial, operational, and management insights; enhance financial consolidation; reduce time-to-close; promote internal control and auditability; and achieve consistency across finance operations. The company also provides cloud spend management solutions that helps organizations to streamline supplier selection and contracts, manage indirect spend, and build and execute sourcing events, such as requests for proposals; Human Capital Management (HCM) solution, a suite of human capital management applications that allows organizations to manage the entire employee lifecycle from recruitment to retirement, and enables HR teams to hire, onboard, pay, develop, reskill, and provide employee experiences; Workday applications for planning; and applications for analytics and reporting, including augmented analytics to surface insights to the line of business in simple-to-understand stories, machine learning to drive efficiency and automation, and benchmarks to compare performance against other companies. It serves professional and business services, financial services, healthcare, education, government, technology, media, retail, and hospitality industries. The company was formerly known as North Tahoe Power Tools, Inc. and changed its name to Workday, Inc. in July 2005. Workday, Inc. was incorporated in 2005 and is headquartered in Pleasanton, California.
ROIC (TTM)
4.9%
ROE (TTM)
8.0%
FCF Yield
8.56%
Based on trailing twelve-month data, WDAY shows a free cash flow per share of N/A and a ROIC of 4.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 8.56% are important context metrics when evaluating WDAY's stock valuation relative to peers.
The intrinsic value of WDAY depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether WDAY is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $122.43. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Workday, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Software - Application industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting WDAY's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Workday, Inc., this means projecting how much free cash flow the Software - Application will produce over the next 5-10 years, then discounting those amounts to today's dollars. WDAY's ROIC of 4.9% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For WDAY, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
