Workday, Inc.

Methodology

Workday's fair value calculation is complicated by the company's transition from high-growth SaaS company to mature enterprise software provider, where GAAP profitability is still emerging and stock-based compensation is substantial. The method becomes more applicable as the business matures and GAAP earnings stabilize, but investors should adjust for equity compensation and focus on free cash flow or non-GAAP operating margins. Fair value estimates are most reliable when normalized for mature-state economics rather than current results still impacted by heavy investment.

Methodology

Workday typically commands premium PEG ratios reflecting its position as a leading provider of cloud HCM and financial management software to large enterprises, with high switching costs and long-term contracts. The PEG framework works reasonably well for Workday as growth moderates from high rates toward mid-teens, though investors should use subscription revenue growth or non-GAAP earnings rather than GAAP metrics. Comparing Workday's PEG to other enterprise SaaS companies provides context for relative valuation as the business matures.

Methodology

Workday pays no dividend and has no plans to initiate one, as management prioritizes reinvesting in product development, international expansion, and sales capacity to capture enterprise software market share. PEGY therefore equals PEG with no yield component, reflecting the company's growth-focused capital allocation. For Workday investors, evaluating customer retention, new product attach rates, and international penetration matters far more than dividend income.