Workday, Inc. WDAY is set to release first-quarter fiscal 2027 results on May 21, after the closing bell. In the trailing four quarters, the company delivered an earnings surprise of 8.53%, while in the last reported quarter, it delivered an earnings surprise of 7.39%.
Workday is expected to report year-over-year revenue growth in the first quarter, driven by strong demand for its human capital management and financial management solutions. Growing customer interest in its artificial intelligence (AI)-powered products and continued enterprise expansion are tailwinds.
Factors at Play
During the quarter, Workday expanded its employee wellness platform through its partnership with Lyra Health. The addition of mental health solutions is likely to have generated revenues by improving Workday’s HR offerings, increasing customer interest and creating more opportunities to sell additional HR and wellness products.
Workday introduced Sana, its AI-powered platform that helps businesses automate tasks and improve productivity. The launch is likely to have supported fiscal first-quarter revenue growth by increasing demand for Workday’s AI products and strengthening adoption of its HR and finance platform.
During the quarter under review, Workday is likely to have benefited from large customer renewals and expansion deals across its enterprise business. Increasing usage of its HR, finance and AI products by existing customers is expected to have supported recurring subscription revenues.
The company further strengthened its enterprise customer base by modernizing Fairview Health Services’ HR, finance and supply chain operations on a unified AI-powered platform. The deal is expected to have contributed positively to the company’s upcoming quarterly performance, particularly in the healthcare sector.
For the April quarter, the Zacks Consensus Estimate for revenues is pegged at $2.52 billion, indicating an increase from the year-ago quarter’s $2.24 billion. The consensus estimate for adjusted earnings per share is pegged at $2.49, implying growth from $2.23 reported in the prior-year quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Workday for the fiscal first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Workday carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Workday, Inc. Price and EPS Surprise
Workday, Inc. price-eps-surprise | Workday, Inc. Quote
Stocks to Consider
Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Ciena Corporation CIEN is set to release its second-quarter fiscal 2026 numbers on June 4. It has an Earnings ESP of +1.76% and sports a Zacks Rank #1 at present.
The Earnings ESP for NVIDIA Corporation NVDA is +0.93%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report first-quarter fiscal 2027 numbers on May 20.
The Earnings ESP for Broadcom Inc. AVGO is +0.15%, and it carries a Zacks Rank of 2 at present. The company is scheduled to report second-quarter fiscal 2026 numbers on June 3.
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Workday, Inc. (WDAY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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