Workday, Inc. (WDAY) Stock Valuation — PE Analysis
Software - Application · NASDAQ
Current Price
$186.55
PE Ratio (TTM)
37.7x
Intrinsic Value
$218.45
+14.6% margin of safety
COMPETITIVE MOAT
↑Deep Customer Relationships and Switching Costs
Workday's comprehensive suite of HR and finance applications creates significant switching costs for its enterprise clients. Once integrated, migrating complex data and processes is a substantial undertaking.
↑Network Effects in HCM Ecosystem
As more companies adopt Workday's Human Capital Management (HCM) platform, its value increases for all users through shared best practices and a larger talent pool familiar with the system.
↑AI-Driven Innovation and Data Advantage
Workday's continuous investment in AI, exemplified by Total Benefits, leverages its vast customer data to enhance product offerings and create a more intelligent, integrated experience.
INVESTMENT RISKS
↓Talent Acquisition and Retention Challenges
The highly specialized nature of enterprise software development requires attracting and retaining top engineering and AI talent, which is a competitive and costly endeavor.
↓Customer Concentration in Large Enterprises
A significant portion of Workday's revenue comes from a relatively small number of large enterprise clients, making it vulnerable to the loss of any single major customer.
↓Pace of Technological Disruption
While Workday is investing in AI, the rapid evolution of technology means it must constantly innovate to stay ahead of emerging solutions and potential disruptive forces.
Base case
WDAY base case PE valuation
At a current price of $186.55, the base case PE valuation puts WDAY fair value near $218.45 per share. That figure assumes 10.7% yearly earnings growth, a target PE multiple of 36.72x, and a 10% discount rate.
Intrinsic Value
$218.45
Margin of safety
+14.6%
Expected annual return
+3.2%
Base case assumptions: 10.7% annual earnings growth, 36.72x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-06.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the WDAY PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Workday, Inc. respond.
Open PE Calculator for WDAYCompany Overview
Workday, Inc. delivers comprehensive, cloud-hosted enterprise software solutions to clients worldwide. These platforms empower organizations to strategize, operate, examine performance, integrate with existing systems, and oversee their overall business functions. A core offering includes a robust suite of financial management tools. These are designed to assist Chief Financial Officers (CFOs) in meticulously maintaining general ledger accounting data, streamlining financial workflows, gaining instant insights into financial and operational metrics, optimizing consolidation, accelerating month-end closes, bolstering internal controls and audit readiness, and ensuring uniformity throughout their financial activities. Workday also provides cloud-based spend management solutions. These facilitate smoother supplier engagement and contract administration, optimize the handling of indirect expenditures, and enable the effective execution of sourcing initiatives, including requests for proposals (RFPs). Its Human Capital Management (HCM) platform stands out, offering a comprehensive set of applications for overseeing the entire employee journey—from initial recruitment through to retirement. This empowers HR departments to efficiently handle hiring, onboarding, payroll, talent development, reskilling programs, and to cultivate exceptional employee experiences. Furthermore, the company offers dedicated applications for business planning, alongside powerful analytics and reporting capabilities. These advanced tools feature augmented analytics that translate complex data into easily digestible narratives for business users, leverage machine learning for enhanced operational efficiency and automation, and provide benchmarking features to compare performance against industry peers. Workday's diverse clientele spans numerous sectors, including professional and business services, financial institutions, healthcare providers, educational bodies, government agencies, technology firms, media organizations, retailers, and the hospitality industry. Originally incorporated in 2005 as North Tahoe Power Tools, Inc., the company adopted the name Workday, Inc. in July of the same year. Its corporate headquarters are located in Pleasanton, California.
Financial Metrics — WDAY PE Stock Valuation Data
PE Ratio (TTM)
37.7x
PEG Ratio
0.30
Earnings Yield
2.72%
ROE (TTM)
16.8%
Revenue/Share (TTM)
$40.72
Debt/Equity
0.58x
Frequently Asked Questions
What is the PE ratio of WDAY?
The trailing twelve-month PE ratio of WDAY reflects how much investors pay per dollar of Workday, Inc.'s earnings. This metric is most useful when compared to Software - Application peers and the company's own historical range.
Is WDAY overvalued based on PE ratio?
WDAY's PE of 37.7x combined with a PEG ratio of 0.30 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Software - Application, a DCF analysis may be more appropriate.
How do I value WDAY stock using PE ratio?
To value Workday, Inc. using PE: (1) Compare the current PE (37.7x) against the Software - Application median to assess relative pricing, (2) check the PEG ratio (0.30) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of WDAY?
WDAY's PEG ratio is 0.30, calculated by dividing the PE ratio (37.7x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for WDAY stock valuation?
PE ratio gives a quick relative read — how WDAY is priced versus Software - Application peers. DCF provides an absolute value based on projected free cash flows. For WDAY, with a strong ROE of 16.8%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See WDAY DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value WDAY with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-06. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.