Workday (NASDAQ:WDAY) stock declined by more than 4% in price after the company announced its third-quarter results on Friday, despite double-digit revenue and EPS growth. However, with impressive long-term growth prospects, we think the current price dip could be the perfect entry point. So, let’s discuss.With a $71.08 billion market capitalization, Workday, Inc. (WDAY), which is headquartered in Pleasanton, Calif., is a leading enterprise cloud applications provider. The company has benefited substantially from the work-from-home trend over the past year. WDAY beat analyst estimates in each of the trailing four quarters.
For its fiscal third quarter ended October 31, 2021, WDAY’s revenues increased 20% year-over-year to $1.33 billion. This can be attributed to a 21% rise in subscription revenues. Its non-GAAP operating income rose 23.9% from the same period last year to $332.20 million. Its non-GAAP EPS came in at $1.10, up 27.9% from the prior-year quarter. And the company topped the Street’s EPS estimates by 27.9%.
However, the stock has declined 4.2% in price since its third-quarter earnings release on November 19, due to speculation surrounding its acquisition of VNDLY for $510 million. However, the acquisition is expected to boost WDAY’s business strength, given VNDLY’s expertise in cloud-based external workforce and vendor management technology. Also, WDAY will gain direct access to VNDLY’s Fortune 500 clients through the business combination.