Workday: Product Demand Driving Its Share Price Higher

Feb. 22, 2018 11:47 AM ETWorkday, Inc. (WDAY)3 Comments
Josh Rudnik profile picture
Josh Rudnik


  • WDAY is breaking out higher.
  • Demand for its platform is driving revenue higher.
  • I am buying stock in the name.

Workday (NASDAQ:WDAY) is breaking out higher on strong fundamental growth. Although the company has only been public for a few years, its price action has formed a strong base formation and is now breaking out higher. Demand for its cloud service is strong, leading to revenue growth. It continues to lose money, but is reducing the size of its losses in recent quarters. I am buying stock in the name and looking to hold for 1-5 years.

Price Action

WDAY's share price looks to be breaking out higher on both its short- and long-term charts. Below are its hourly and monthly chart. Although WDAY has not been a public company for very long, its share price looks to be building a solid long-term base. As fundamental growth has accelerated, investors have begun to bid its share price up to new highs. Its recent break above $115 was significant as this level had acted as strong long-term resistance.

Moreover, on its short-term chart, the price action is similarly bullish. The stock has trended higher over the last year, with few pullbacks, and no selling pressure strong enough to derail the trend lines.

As its fundamental story improves, and demand for its services continue to be strong, its stock should continue to trend higher. I am however watching the $119 level as a stop-loss. This area has acted as support recently, and should its share price dip below these levels, it would violate my buy thesis and force me to sell.

Source: Trading View

Fundamental Narrative

WDAY is seeing strong top-line growth while it attempts to turn to profitability in coming years. In the most recent quarter, the company saw total revenues come in at $555.4 million, an increase of 34.4% from the third quarter of fiscal 2017. This was led by a

This article was written by

Josh Rudnik profile picture
I am currently a portfolio manager at an RIA in Philadelphia with over $1 billion in assets. The portfolio is dedicated towards macro themed positioning with equities, ETFs, fixed income, as well as options and other alternatives. There are opportunities everywhere, both on the long and short side, and I aim to generate absolute returns on an annualized basis for clients. My absolute return portfolio has returned double-digit percentage returns over the last decade regardless of if the market is selling off, or rallying higher with enthusiasm. Relative returns are nice, but at the end of the day, you can't eat relative returns. When the S&P 500 is down 20%, it doesn't necessarily mean you have to be down too. Join my Marketplace service, Absolute Returns, and see how I am positioning my portfolio in real-time, and what trade ideas are coming about daily. I also offer a live chat as part of the service, where questions and ideas can be discussed.

Disclosure: I am/we are long WDAY. 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.

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