Lifted By Nearly 10-Fold Sales Gain, Cloud Stock Shows Resilience

It’s hard for any stock to keep rising as the stock market indexes come under pressure. But cloud-based human resources leader Workday (WDAY) is showing resilience as it tries to buck the current stock market trend. After a 14% weekly jump at the end of last month, WDAY stock is now eyeing a new buy point.


That action has earned Workday a spot on the IBD Breakout Stocks Index. The company’s fundamental and technical performance has also garnered demand among leading mutual funds.

Including Fidelity OTC (FOCPX), 296 funds with an A+ rating from IBD own Workday stock. Plus, Workday has posted eight quarters of rising fund ownership.

See Who Joins Workday On The IBD Breakout Stocks Index

Human Resources Leader Workday Sees Almost 10-Fold Sales Growth

Based in Silicon Valley, Workday has over 8,000 customers around the world, including 45% of the Fortune 500. The company provides enterprises with cloud-based solutions for finance and human resources. In addition to finance, Workday handles human resources needs across a wide range of industries, including health care, technology, insurance, retail and more.

In its Workday 2021 Global Impact Report, the company noted that revenue has risen nearly 10-fold over the last seven years. Sales have jumped from $469 million in fiscal 2014 to $4.3 billion in fiscal 2021 (ended Jan. 31).

Workday earns an A SMR Rating, which tracks sales growth, profit margins and return on equity. Those are the three key ingredients that ultimate drive earnings growth, and WDAY stock scores passing grades in Stock Checkup for each.

Speaking of earnings growth, Workday has also been strong on that front. Over the last three years, Workday has posted average annual EPS growth of 47%. Analysts expect the company to deliver 24% earnings growth in the current fiscal year.

WDAY Stock Tries To Break Out As Indexes Try To Hold On

The M in CAN SLIM stands for market direction. And the current action in the stock market indexes shows why understanding current market trends is so important. If the market is under pressure or in a correction, it’s difficult for any stock to buck that selling pressure.

While the stock market uptrend remains intact, WDAY stock is currently facing that type of overall weakness in the general market.

The Nasdaq, S&P 500 and Dow Jones Industrial Average have all slipped below their 50-day and 10-week moving averages. Workday, on the other hand, has stayed above both those benchmark lines.

While it is risky to make new purchases when the stock market is under pressure, the tide can turn very quickly. WDAY stock is showing resilience, as indicated by the recent rise in its relative strength line.

See if the stock market indexes can regain strength and resume their climbs. If they can, look for Workday to follow suit and push past its 278.33 buy point in a handle and break out to a new all-time high.

IBD Breakout Opportunities ETF

The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to essentially invest in the entire index in addition to or rather than buying the individual stocks. Learn more here about the ETF and Innovator funds.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


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