DCF Studio

    WDAY · NMS · Technology

    Workday, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 23.99

    Market price

    USD 198.13

    Implied upside

    -87.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-01-31

    Current EV/EBITDA of 33.6x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 23.99-87.9%
    Exit multiple
    USD 64.72-67.3%
    Market price
    USD 198.13

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m163m327mFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 10.7bnUSD 11.8bnUSD 12.9bnUSD 14.0bnUSD 15.0bnUSD 16.0bnUSD 16.9bnUSD 17.6bnUSD 18.3bnUSD 18.7bn+6.4%
    EBITUSD 432.6mUSD 477.7mUSD 522.9mUSD 567.1mUSD 609.5mUSD 648.9mUSD 684.5mUSD 715.2mUSD 740.2mUSD 758.7m+6.4%
    NOPATUSD 341.7mUSD 377.4mUSD 413.1mUSD 448.0mUSD 481.5mUSD 512.6mUSD 540.7mUSD 565.0mUSD 584.7mUSD 599.3m+6.4%
    Add depreciation & amortisationUSD 459.6mUSD 507.5mUSD 555.5mUSD 602.5mUSD 647.5mUSD 689.4mUSD 727.2mUSD 759.8mUSD 786.3mUSD 806.0m+6.4%
    Less capital expenditureUSD -376.6mUSD -438.0mUSD -503.6mUSD -572.5mUSD -643.5mUSD -715.2mUSD -786.0mUSD -854.4mUSD -918.5mUSD -976.6m+11.2%
    Capex, % of revenue3.5%3.7%3.9%4.1%4.3%4.5%4.7%4.8%5.0%5.2%-
    Less increase in working capitalUSD -248.5mUSD -248.4mUSD -248.2mUSD -243.1mUSD -232.7mUSD -216.9mUSD -195.5mUSD -168.8mUSD -137.3mUSD -101.7m-9.4%
    Free cashflow to firmUSD 176.2mUSD 198.6mUSD 216.7mUSD 234.9mUSD 252.7mUSD 270.0mUSD 286.4mUSD 301.6mUSD 315.2mUSD 327.0m+7.1%
    Discount factor0.95880.88140.81020.74480.68470.62940.57860.53190.48900.4495-
    Present valueUSD 168.9mUSD 175.0mUSD 175.6mUSD 174.9mUSD 173.1mUSD 170.0mUSD 165.7mUSD 160.4mUSD 154.1mUSD 147.0m-
    Present Value Of The ForecastUSD 1.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.006Reported 1.009, pulled toward 1.0 (Blume)
    Cost of equity9.15%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 9.0x interest cover. Book interest / average debt was lower, at 3.2%.
    Market capitalisationUSD 47.7bn92.6% of capital
    Total debtUSD 3.8bn7.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.78%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 23.99

    65% of EV

    Forecast FCFF, final year
    USD 327.0m
    Capex at depreciation, working capital in reinvestment
    USD 599.3m
    Less reinvestment at g/ROIC (28.5% of NOPAT)
    USD -170.6m
    Capitalised
    USD 428.7m
    ROIC (WACC floor)
    8.8%
    Terminal value, undiscounted
    USD 7.0bn
    Terminal value, discounted
    USD 3.1bn
    Enterprise value
    USD 4.8bn
    Less net debt
    USD -1.6bn
    Equity value
    USD 6.4bn

    Exit at 20.0x EBITDA

    Value per shareUSD 64.72

    89% of EV

    Terminal value, undiscounted
    USD 31.3bn
    Terminal value, discounted
    USD 14.1bn
    Enterprise value
    USD 15.7bn
    Less net debt
    USD -1.6bn
    Equity value
    USD 17.4bn

    Spread between methods: 92%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.78%31.2030.8230.4330.0529.67
    7.78%27.4127.0926.7826.4626.14
    8.78%24.5224.2523.9923.7223.46
    9.78%22.2522.0221.8021.5721.35
    10.78%20.4220.2320.0419.8519.65

    Outlined: this model. Green text: above today's price of 198.13. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year15.4%7.0%47.8%
    EBIT margin10.7%4.1%36.3%
    Discount rate-8.8%2.7%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.