Workday, Inc. (WDAY) Stock Valuation — PE Analysis
Software - Application · NASDAQ
Current Price
$168.01
PE Ratio (TTM)
52.2x
Intrinsic Value
$192.31
+12.6% margin of safety
COMPETITIVE MOAT
↑Deep Customer Integration
Workday's cloud-based HR and finance applications are deeply embedded in customer operations. This creates significant switching costs for businesses reliant on its integrated suite.
↑Network Effects in Talent Cloud
The Talent Cloud connects employers with a vast network of job seekers and talent data. This growing network makes the platform more valuable as more users join.
↑AI-Driven Efficiency Gains
AI integration enhances user experience and operational efficiency within Workday's platform. This continuous improvement drives customer stickiness and adoption.
INVESTMENT RISKS
↓Customer Concentration Risk
While not explicitly stated, reliance on a few large enterprise clients could pose a risk if any significant customer churns.
↓Technological Disruption
Rapid advancements in AI and other technologies could disrupt the application software landscape, requiring continuous innovation from Workday.
↓Execution on AI Strategy
The company's valuation hinges on successful AI adoption driving expansion. Failure to effectively integrate and monetize AI could impact future growth.
Base case
WDAY base case PE valuation
At a current price of $168.01, the base case PE valuation puts WDAY fair value near $192.31 per share. That figure assumes 11.0% yearly earnings growth, a target PE multiple of 50x, and a 10% discount rate.
Intrinsic Value
$192.31
Margin of safety
+12.6%
Expected annual return
+2.7%
Base case assumptions: 11.0% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-29.
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)
52.2x
PEG Ratio
0.70
Earnings Yield
1.99%
ROE (TTM)
10.4%
Revenue/Share (TTM)
$38.81
Debt/Equity
0.57x
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 52.2x combined with a PEG ratio of 0.70 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 (52.2x) against the Software - Application median to assess relative pricing, (2) check the PEG ratio (0.70) 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 0.70, calculated by dividing the PE ratio (52.2x) 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 the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. 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 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.