Insider buying can provide clues about a stock’s next move. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
In this report, we are going to highlight some interesting insider buying at Workday Inc (WDAY:US). Workday is a US software company that offers financial management and HR solutions for enterprises. Its software is designed to help businesses enhance their operational performance and make decisions faster. The company is listed on the Nasdaq and currently has a market cap of around $64.7 billion.
Our data shows that on August 29, Co-CEO Carl Eschenbach purchased 8,676 shares at a price of $240.44. This trade – which was part of a 10b5-1 trading plan – cost the insider approximately $2.1 million.
While this trade was an automated purchase, we still think it’s notable.
Mr. Eschenbach has been a member of Workday's board of directors since 2018, so he is likely to know the company well. Additionally, he has broad experience at a lot of other tech firms including Palo Alto Networks, Snowflake, UiPath, and Zoom Video Communications.
He also has an investment background. Prior to Workday, he was a general partner at venture capital firm Sequoia Capital. And he continues to stay involved with Sequoia in a venture partner capacity.
Workday recently posted a good set of Q2 results that were ahead of estimates.
For the quarter, total revenues amounted to $1.79 billion, an increase of 16.3% from the second quarter of fiscal 2023, while subscription revenues were $1.62 billion, an increase of 18.8%. Earnings per share came in at $1.43 versus the consensus forecast of $1.26 per share.
On the back of these results, the company raised its fiscal 2024 guidance. It now expects fiscal 2024 subscription revenue to grow 18% year on year to a range of $6.57 billion to $6.59 billion and non-GAAP operating margin guidance to hit 23.5%.
"We're incredibly well positioned going into the second half of our fiscal year as Workday is increasingly seen as the system of trust for enterprises around the world," said Mr. Eschenbach.
“Our growing customer base, continued global expansion, industry growth, and partner ecosystem momentum set us up for durable long-term success,” he added.
In light of this solid performance, we see the insider buying here as a bullish development.