Workday stock plunges on subscription revenue forecast

Workday (WDAY) shares continue to take a beating, plunging lower in Friday's trading after the cloud-based corporate management platform slashed its full-year subscription revenue outlook. Workday's stock has fallen by over $40 since the market close yesterday.

Yahoo Finance's Market Domination team reviews Workday's first-quarter earnings beat reported on Thursday.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Luke Carberry Mogan.

Video transcript

Uh, shares of Work Day.

They are plunging today after the company slashed its forecast of annual revenue work day, taking other workplace software stocks down with it, and investors now look ahead to sales force results out after the close Wednesday for another read on the industry.

And Julie, this is just a case of you're either a I or you're not.

And this kind of echoed by Bloomberg Quick quote here.

The weaker outlook supports our thesis of a weak environment for non A i Enterprise tech.

Yeah, that was really the quote that stuck out to me as well, because when this kind of thing happens, the first question you ask is, OK, is this work day specific, or is this something bigger that's going on in the industry?

Um, it seems like it is perhaps the latter.

Now the company has been trying to undergo a bit of a turnaround under the CEO who now holds the sole CEO spot.

Carl Eschenbach, um, and analyst commentary seem to be relatively optimistic that he can do it over the law longer term.

But they acknowledge that the short term is going to be bumpy because in part because of the macro environment, and it wasn't all bad.

Results were mixed, according to RBC, leading to this lowered outlook.

But, he said, on the bright side, operating margins of 25.9% solidly above consensus.

Quick quote by vital knowledge investors will focus on the subscription revenue outlook cut, even though, if it's modest or even though it is modest.

And that's really what got investors attention.

But if we can go to the Wi Fi Interactive here, I do wanna show our heat map and you can see Work Day.

This is today's results.

Work day down at the bottom, down 15%.

Here is a year to date and just just kind of illustrates the have and have nots where you have, uh, the top row, the green and even that's not great when you compare it to the chip stocks.

But you look at the bottom row twilio down 22% VRM down to 78% Teladoc in there.

So it's been kind of a rough patch for, uh, software this year.

Yeah, it certainly has been, um, that's a good perspective to have there, and I feel like new Tai is getting bought, so that's the reason that that one is up so much