Jim Cramer on Workday: “An Old Favorite, But Not Anymore”

Workday, Inc. (NASDAQ:WDAY) is one of the S&P 500 stocks that Jim Cramer shared his take on. Noting the CEO change, Cramer commented:

The fifth-worst performer in February was Workday, an old favorite, but not anymore. It was down 23.8%. This one’s an actual enterprise software company focused on platforms for human resources and finance. Workday was dragged down along with the broader enterprise software cohort in January. Then it got hit again February 9th when we learned that CEO Carl Eschenbach would be stepping down. He’s going to be replaced by… co-founder Aneel Bhusri, who I know well, and I think is terrific.

… You don’t make that change when things are going real well. But don’t forget, Bhusri’s a steady hand. Last week, Workday reported, and though its results were fine, the company also lowered its full-year sales growth forecast. They only issued that previous forecast three months ago. After initially falling further in response to the quarter, though, the stock found its footing and was able to rebound.

Do you know it’s now up almost 14% from its intraday low last Wednesday? So you have to ask, is this a real bottom? Look, Workday’s now selling at an astoundingly low 13 times this year’s earnings estimate, like some dusty old cyclical. You could argue that makes it too cheap to ignore, but the enterprise software stocks are so hated that I’m not sure Wall Street will care. I think it’s probably too soon to start bottom fishing. Maybe it retests the old low. The price-to-earnings multiple continues to shrink.

Photo by Joshua Mayo on Unsplash

Workday, Inc. (NASDAQ:WDAY) provides cloud-based applications designed to help organizations manage financial processes, human resources, and business planning.

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