Workday announced quarterly results yesterday. Revenues came in better than expected at 107 million against a consensus estimate of 100 million. Workday also upped guidance for annual revenues by roughly 10 million:
For fiscal year 2014, Workday now expects revenue in the range of $436 million to $446 million, from its prior range of $425 million to $440 million. Analysts currently expect revenue of $439.44 million for the year.
Wall Street analysts have jumped in by raising their price targets by an average of 20 %, anywhere from 70 to 88 USD per share.
Let's forget that Workday is already the most overvalued large cap stock on Wall Street, with widening losses and a market cap of a whopping 40 times trailing revenues. Let's put these upgrades into perspective. The analysts translate a 10 million upward revenue guidance into a 20% increase in valuation. The current valuation is 13 billion. So they want to make you believe that in fact Workday is worth 2.6 billion more. 20% of 13 billion is 2.6 billion. And this is based on a 10 million upward guidance. Hence the 10 million increase is worth 2.6 billion?
Come on! These Wall Street crooks are not even kissing you before you get f*cked