WDAY - Embedded Expectations Analysis - 2021 02 02
Workday, Inc. (WDAY:USA) currently trades above recent averages relative to UAFRS-based (Uniform) assets, with a 12.0x Uniform P/B. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about their Workday Talent Workplace, installed base growth, and new M&A activitySpecifically, management may be exaggerating the potential of the Workday Talent Marketplace, and they may lack confidence in their ability to grow their installed base and bring additional SKUs to market. Moreover, they may lack confidence in their ability to further drive ACV bookings growth using their current products, find new acquisitions that align with the Adaptive and Scout models, and execute the most efficient planning cycle for their business. Finally, management may have concerns about the pace of recovery for customers affected by the pandemic
Workday is a provider of enterprise cloud applications for finance and human resources. The company's products include: Workday Financial Management, an application with financial capabilities, analytics and metrics, and auditable process management; and Workday Human Capital Management, which includes global human resources management (workforce lifecycle management, organization management, compensation, absence, and employee benefits administration) and global talent management (goal management, performance management, succession planning, and career and development planning). The company's other solutions include Adaptive Insights Business Planning Cloud, as well as Workday Data-as-a-Service.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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