Cloud-based enterprise-solutions provider Workday will report earnings for the first fiscal quarter of 2017 on Tuesday, after market close.
Wall Street analysts are expecting the company to report a loss of $0.02 a share on revenue of $339 million for the quarter. For the current quarter ending in July, estimates are for a loss of $0.01 a share on revenue of $371 million. For the year ending January 2017, the Street is modeling $0.02 a share on revenue of $1.55 billion, and for full-year 2018, the Street expects earnings of $0.27 a share on revenue of $2.03 billion.
Workday shares have been trading in a range between $85 and just below $50 since it got caught up in the selloff this past February, as investors bought into the "China growth" panic -- as if a slowdown from 8% GDP growth to 6.5% was reason to run about screaming "the sky is falling."
The real problem, of course, was the totally ill-advised and ill-timed interest rate hike by our Federal Reserve -- just when China growth was slowing, our own economic data was spotty at best and the rest of the world, including the European Central Bank, was in further stimulus mode.
Just on Friday, Wedbush downgraded Workday to an Underperform, which is the Wall Street equivalent of a Sell. It is very rare to see that from a sellsider, and a move to be applauded for independent thinking -- even if the downgrade turns out to be wrong when the company reports, later today.
Keep in mind that the analyst at Wedbush was already at Neutral, and cited deteriorating fundamentals and a high valuation as his rationale for the downgrade.
On the flip side, Barclays analysts said that investors should expect another beat from the company, which it said was a "pillar of growth." Barclays reiterated its Equal Weight on the shares.
I am in agreement with Wedbush, although I do not have any skin in the game, at the moment.
Good luck into the earnings report for Workday -- whether you are in the light or in the dark.