Jefferies’ Top Crowded Software Long Positions: Top 10 Stocks

5. Workday Inc. (NYSE:WDAY)

Number of Hedge Fund Holders In Q2 2024: 86

Shares Short % Of Outstanding: 1.75%

Workday Inc. (NYSE:WDAY) is a human operations and financial management software as a service provider. With the broader business spending and operating environment still struggling from the Federal Reserve’s 24-year high interest rate cycle and inflationary trends, the firm has felt the pinch as its shares are down 9.14% year to date. Workday Inc. (NYSE:WDAY) prospers when businesses are hiring and when firms have ample money in their budget to invest in process software, and it has struggled in today’s high inflation era. During the firm’s fiscal years 2021 to 2023, it struggled to keep costs under control and ended up posting operating losses in each of the years. This was even though for each year, Workday Inc. (NYSE:WDAY) also grew revenue by roughly $1 billion. The slow labor market has also injected considerable volatility into its shares. For instance, the stock fell by 15% in May after Workday Inc.’s (NYSE:WDAY) fiscal first quarter SEC filing warned that moderating business spending could create future headwinds. Yet, the shares jumped by 12.5% in August after the Q2 report saw Workday Inc. (NYSE:WDAY) beat analyst EPS and revenue estimates of $1.65 and $2.071 billion by posting $2.085 billion revenue and $1.75 in EPS and increase its 2027 margin guidance by five percentage points to 30%.

Parnassus Investments mentioned Workday Inc. (NYSE:WDAY) in its Q2 2024 investor letter. Here is what the fund said:

“Workday, Inc. (NASDAQ:WDAY), a provider of human capital and financial management software, warned of slower growth in subscription revenue even as first-quarter revenue and earnings topped expectations. We added to our position as it fell to a valuation that we believe does not reflect its revenue growth and increasing operating margins.”