Companies · WDAY · Software (System & Application)
What does Workday's price assume?
The margin the price assumes
Revenue grows as its record suggests; the operating margin is solved at today's price.
At $191.16 on November 11, 2026, with growth of 15.0% a year, the price assumes an operating margin of 26.7% by year 5.
The price assumes
26.7%
Operating margin by year 5, solved at the price
Its 10-year median
6.0%
Fiscal 2016–2025, adjusted for R&D and leases
Its industry
34.4%
Software (System & Application), Damodaran Online, January 2026
The price assumes a margin above the company's own median, and below its industry's.
The numbers behind the chart
| Fiscal year | Adjusted operating margin |
|---|---|
| 2016 | 0.3% |
| 2017 | 5.5% |
| 2018 | 2.2% |
| 2019 | 4.1% |
| 2020 | 6.2% |
| 2021 | 6.2% |
| 2022 | 5.8% |
| 2023 | 10.4% |
| 2024 | 10.7% |
| 2025 | 10.7% |
- Revenue growth, years 1 to 5
- 15.0% a yearCapped at 15%, the most this neutral starting point allows.SEC filings, revenue to fiscal 2025
- Margin path
- From today's margin to 26.7% by year 5Solved at the price. After that, the margin holds.
The growth the price assumes
At its median margin, no revenue growth between −50% and 100% a year matches today's price.
The assumptions both views share
These are neutral settings, the same for every company. Each view holds them and solves for one driver at today's price.
- Reinvestment
- $1.54 of revenue for each $1 investedThe industry's sales-to-capital ratio: how much new capital growth needs.Damodaran Online, January 2026 industry data, Software (System & Application)
- Cost of capital
- 9.29%The return investors need for the risk: the industry's beta, the market's risk premium, and debt rated Baa2/BBB from its median margin, with a stated 5-year debt maturity. Built by the engine from the parts listed under Sources, each with its date.
- After year 10
- Growth at the riskfree rate, foreverNew investment earns its cost of capital and no more, so growth after year 10 adds no value, and the cost of capital moves to a mature company's.
Worth knowing
- Revenue grew 17.2% a year over five years and grew 23.5% over ten: the record points two ways.
- Its industry's margin today is more than 3 points away from its median over the last 6 years of industry data.
- Profitable in 3 of the last ten years, so its median margin is a weak yardstick.
This is a mechanical starting point with neutral assumptions, not a valuation. The story decides.
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- Price: Qualuation's records, close of November 11, 2026.
- 10-K for the period ended January 31, 2026, filed March 6, 2026 (SEC EDGAR, accession 0001327811-26-000014).
- 10-Q for the period ended July 31, 2026, filed August 27, 2026 (SEC EDGAR, accession 0001327811-26-000044).
- Margin record: SEC filings, fiscal 2016-2025, operating margin adjusted for R&D and leases.
- Industry margin: Damodaran Online, January 2026 industry data, Software (System & Application), adjusted for R&D and leases.
- Sales to capital: Damodaran Online, January 2026 industry data, Software (System & Application).
- US 10-year Treasury yield (FRED), October 29, 2026.
- Less the US default spread (Damodaran Online, July 2026).
- Industry beta, Software (System & Application) (Damodaran Online, January 2026).
- Equity risk premium (Damodaran Online, October 2026).
- Debt rated Baa2/BBB at its median margin (rating table, Damodaran Online, January 2026).
- The margin the price assumes: solved by the engine at the price on November 12, 2026, with the assumptions above.