Workiva Inc (WK, Financial) experienced a significant upward movement in its stock price, rising by 5.4% to $88. This increase was driven by the company's recent fourth-quarter earnings report, which exceeded market expectations.
In the fourth quarter, Workiva reported non-GAAP earnings per share of $0.33, aligning with analyst estimates. The company reported sales of $200 million, surpassing the consensus estimate by approximately $4.8 million. This represents a 20% increase in sales year over year. Additionally, the number of customers with annual contract values over $500,000 surged by 32% compared to the previous year, highlighting the company's strong market traction.
Citi responded to these impressive results by raising its one-year price target for Workiva from $128 to $130 per share and maintaining a buy rating. This new price target suggests a potential further upside of around 47% for the stock.
From a valuation perspective, Workiva's stock is currently trading at a price-earnings ratio (PE) of 0, indicating that the company might not have been generating earnings over the last twelve months. However, its price-to-sales (PS) ratio stands at 6.26, close to its 3-year low, suggesting that the stock is potentially undervalued based on sales metrics. The company's GF Value is estimated at $113.75, suggesting that the stock is modestly undervalued. For more details on its GF Value, please visit GF Value.
Despite some financial warning signs, such as an Altman Z-score of 2.09 indicating some financial stress, Workiva shows strengths with an expanding operating margin and a strong revenue growth rate of 16.1% over the past five years. The company's Beneish M-Score suggests it is unlikely to be a manipulator.
Workiva's business model, as a cloud-native platform that simplifies reporting and compliance tasks, continues to gain traction among enterprises, contributing to its solid market position within the technology sector.
