Workday, Inc. (WDAY): A Bull Case Theory

We came across a bullish thesis on Workday, Inc. (WDAY) on Twitter by TechFundies. In this article, we will summarize the bulls’ thesis on WDAY. Workday, Inc. (WDAY)’s share was trading at $241.67 as of March 12^th. WDAY’s trailing and forward P/E were 123.93 and 28.09 respectively according to Yahoo Finance.

Workday (WDAY) remains a solid, recurring revenue business with high customer stickiness and significant upsell potential. The management team is focused on delivering reasonable growth alongside margin expansion, making the company’s long-term outlook attractive. While AI is not a major growth driver for Workday, its limited impact also suggests a lack of significant competitive threats. Investors have not assigned an AI premium to the stock, making the current valuation compelling with a strong risk/reward setup for patient investors.

The CEO’s commentary at the MS TMT conference was reassuring, reflecting confidence in the company’s recent performance. Workday maintains steady revenue linearity and benefits from a diversified customer base. It holds two of the three most critical systems of record—employee and financial data—though it lacks direct customer engagement. Notably, 50% of net new business comes from new customers, while the other half is driven by expanding sales within its existing install base, demonstrating the platform’s strength. In key verticals like healthcare, 80% of sales are full-platform deals, and over 50% of state, local, and education deals follow the same pattern. Workday now has 2,000 full-suite customers out of a total base of 6,100.

On the financials front, Workday has already made a major hiring push for its financial management segment and is now focused on improving sales productivity rather than further expansion. AI remains an emerging but uncertain factor. The company has recently launched Recruiter Agent, which presents upsell opportunities across 4,000 core recruiting agents, and AI tools that accelerate development on top of Workday’s platform. With de-risked guidance, a solid customer base, and multiple levers for growth, Workday presents an attractive investment case with limited downside and long-term upside.

Workday, Inc. (WDAY) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 89 hedge fund portfolios held WDAY at the end of the fourth quarter which was 84 in the previous quarter. While we acknowledge the risk and potential of WDAY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WDAY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.