working pattern internet abstract

Workiva Q3 Earnings: Can NYSE:WK Hit Its -$0.12 EPS Target?

in EARNINGS/INVESTING IDEAS by

Workiva Inc. (NYSE:WK) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of -$0.12/share on revenue of $84.543 million. The consensus earnings per share (EPS) of -$0.12/share is based on a poll of 7 analysts and represents a growth in eps of 1.2% over the same quarter last year, when the company reported earnings of -$0.12/share.

The revenue forecast of $84.543 million based on a poll of 6 analysts implies a year-over-year (YoY) growth in revenue of 14.0%. Last year the company reported $74.179 million in revenue for the quarter.

Expected to report EPS of -$0.12/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $84.54 $74.18 14.0%
EPS -$0.12 -$0.12 1.2%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 6 tracked quarters of exceeding earnings guidance.

What are your expectations from Workiva Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.15 -$0.06 58.8% Beat
Q1, 2020 -$0.15 $0.03 120.4% Beat
Q4, 2019 -$0.16 -$0.09 44.2% Beat
Q3, 2019 -$0.17 -$0.12 28.0% Beat
Q2, 2019 -$0.10 $0 100% Beat
Q1, 2019 -$0.04 $0.01 123.1% Beat
Q4, 2018 -$0.10 $0 100% Beat
Q3, 2018 -$0.21 -$0.09 57.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $57.73 $58.09 0.6% Increase
April 30, 2020 $37.38 $35.89 −4.0% Decline
February 20, 2020 $48.79 $47.11 −3.4% Decline
November 6, 2019 $41.23 $38.49 −6.6% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.34, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.34 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Workiva Inc. is currently trading at $54.44/share, down −2.7% for the day. The company is trading at approximately 89.2% of its 52-week high of $61.50/share. The company’s stock price is down −6.3% since the last earnings report and down −0.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 48.58 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:WK Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −41.46 and a forward P/E multiple of −219.97.

Workiva Inc.’s current share price also implies a price-to-book (P/B) multiple of 36.49. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $54.44
P/E Ratio −41.5x
P/E Ratio (Fwd) −220.0x
PEG Ratio 0.6
Total Debt / Total Capital 10.9%
Levered Free Cash Flow $16.255 million
EV / EBITDA −47.0x

Finbox

Workiva Inc. is a mid-cap stock with a market capitalization of $2.672 billion and a total enterprise value of $2.489 billion. The company operates in the Information Technology sector and the Software industry.

Workiva Inc., together with its subsidiaries, provides connected reporting and compliance platform worldwide. The company offers Workiva platform that offers controlled collaboration, data linking, data integrations, granular permissions, process management, and full audit trail services; and Wdata, which includes data integration and preparation tools that enables customers to connect data from enterprise resource planning, governance risk and compliance, and customer relationship management platforms, as well as from other third-party cloud and on-premise systems. It serves public and private companies, government agencies, and higher-education institutions. Workiva Inc. was founded in 2008 and is headquartered in Ames, Iowa.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.