Why Workday (WDAY) is Better Than Salesforce (CRM)

Workday (WDAY) has earnings coming up, and the top line growth in the company should be impressive. Surprisingly, it has better top line growth than the star of the space, Salesforce (CRM). I’ve thrown in data for a competitor in the same general space Automatic Data Processing (ADP), just to compare and contrast. There is almost certainly real, significant, ongoing growth ahead in the move to cloud-based software services for businesses and CRM and WDAY are already participating.

The tables below are a bit sparse, as WDAY is a new IPO, and both CRM and WDAY have little earnings and instead focus on top line growth, and you have to value the companies with that in mind. In particular, take a look at the forecasted sales growth. I have to declare WDAY, despite its high flying nature, as the winner in this category.

Related: Jim Cramer’s week ahead.

 

Stock PE Price/Sales Div Yield (Trailing Annual) Volatility
WDAY N/A 36.4 N/A 0.3
ADP 27.11 3.3 2.2% 0.15
CRM N/A 9 N/A 0.3
Stock EPS Qtr. On Qtr. Growth Rev Qtr. On Qtr. Growth
WDAY N/A   8/2013 N/A   5/2013 N/A   3/2013 N/A   11/2012 71.5%   8/2013 N/A   5/2013 N/A   3/2013 N/A   11/2012
ADP 7.9%   10/2013 -11.5%   8/2013 7.6%   5/2013 5.3%   2/2013 7.7%   10/2013 7.1%   8/2013 7%   5/2013 6.9%   2/2013
CRM N/A   11/2013 N/A   8/2013 N/A   5/2013 N/A   2/2013 36.5%   11/2013 30.8%   8/2013 28.3%   5/2013 32.1%   2/2013

 

Stock Current Qtr EPS Growth Forecast Next Qtr EPS Growth Forecast Current Qtr Rev Growth Forecast Next Qtr Rev Growth Forecast
WDAY N/A N/A N/A N/A N/A N/A 66.6% ( High ) 62% ( Ave. ) 60.1% ( Low ) 66.3% ( High ) 58.1% ( Ave. ) 52.2% ( Low )
ADP -2.5% ( High ) -3.7% ( Ave. ) -5% ( Low ) 12.1% ( High ) 10.1% ( Ave. ) 8.1% ( Low ) 7.7% ( High ) 7% ( Ave. ) 6.3% ( Low ) 8.2% ( High ) 7.3% ( Ave. ) 5% ( Low )
CRM N/A N/A N/A N/A N/A N/A 35.7% ( High ) 34.4% ( Ave. ) 33.2% ( Low ) 36.6% ( High ) 35.4% ( Ave. ) 33% ( Low )

 

The Technicals

When it comes to price, both companies have sold off a bit in the past few days, potentially reaching good buy points. However, be wary of the earnings approaching for WDAY. A sell-off might create a good buying opportunity.

CRM

WDAY