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Workday, Inc. (NYSE: WDAY) is a stock worth watching. Last month, Workday's suite of enterprise cloud solutions was selected by Allied Global Holdings. Workday is a leader of SaaS-based enterprise solutions for global human resource management systems (HRMS). Workday's strong HR functionality and SaaS technology platform makes it the fastest-growing company in pure-play SaaS solutions. Quarter-to-quarter revenue growth is impressive for investors. Workday stock is up $3.86, or 6.7%, to $61.48. Pacific Crest analyst Brendan Barnicle noted Workday could be worth as much as $15 billion with the addressable market at $50 billion now, growing to more than $70 billion by 2015.

Day's Range: 57.31 - 58.93

52-week Range: 45.05 - 65.00

Volume:803,479

Avg Vol (3m): 498,838

Market Cap: 9.73B

P/E: N/A

EPS: -1.62

Div & Yield: N/A

HRMS applications consist of business process and analytics. These applications range from employee life cycle: hiring and onboarding, personnel and benefits administration, compensation, payroll, compliance, performance management, succession planning, and career development. HRMS application suites make up the largest segment of the $9.5 billion market for HRM software and account for half of its total revenue ($4.7 billion).

The HRMS market has moderate growth. SaaS revenue is growing faster than HRMS at a 15% rate. Key drivers of SaaS HRMS adoption include faster implementation times and automatic software upgrades and updates. Workday is a pure-play SaaS vendor. Forrester's 69-criteria evaluation of human resource management system vendors found that Workday, Oracle PeopleSoft, Oracle E-Business Suite, and SAP are the top companies today.

Competition

Oracle and SAP have their own cloud-based services to meet demand for human resources software. The acquisitions for Oracle include the buyout of Taleo for $1.9 billion. SAP acquired SuccessFactors for $3.4 billion. In 2011, SAP had 17.4 percent of the market, followed by Oracle with 12.4 percent, according to IDC. Workday had just 3.5 percent.

Workday's annual profit expectations are due for January 2014 fiscal year. The company went public on October 12. The IPO raised $637 million from selling 22.5 million Class A shares, or about 14 percent of the company. In the days immediately following the sale, Workday stock jumped as high as $57, more than doubling its opening price. The company was able to hold onto most of its gains after doubling in its first four days as a public entity. Three hundred seventy mutual funds owned the stock on Dec. 31. The company's two founders own more than 60% of the stock.

Workday has become an HR software leader from its cloud-based human resources management suite. The company has 350 customers. The largest is Hewlett-Packard Co. Other customers include Flextronics, Chiquita Brands International Inc., Four Seasons Hotels Inc., Kimberly-Clark Corp. and Salesforce.com Inc.

Software configuration flexibility improvements in Workday's new products suite make its business model attractive for investors. Workday has a 52-week low of $45.05 and a 52-week high of $65.00. The company's market cap is $9.726 billion. Quarterly revenue was up 88.7% YOY.


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Workday: A Stock Worth Watching