Workday (NASDAQ:WDAY) vs. GoodRx (NASDAQ:GDRX) Critical Analysis

Workday (NASDAQ:WDAYGet Rating) and GoodRx (NASDAQ:GDRXGet Rating) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Workday and GoodRx’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Workday -0.49% 1.34% 0.56%
GoodRx -1.86% 2.86% 1.48%

Insider & Institutional Ownership

70.6% of Workday shares are owned by institutional investors. Comparatively, 52.6% of GoodRx shares are owned by institutional investors. 21.7% of Workday shares are owned by insiders. Comparatively, 1.5% of GoodRx shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Workday and GoodRx’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Workday $5.14 billion 6.89 $29.37 million ($0.12) -1,161.50
GoodRx $745.42 million 3.25 -$25.25 million ($0.04) -152.75

Workday has higher revenue and earnings than GoodRx. Workday is trading at a lower price-to-earnings ratio than GoodRx, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Workday has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, GoodRx has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Workday and GoodRx, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Workday 0 4 25 0 2.86
GoodRx 1 11 6 0 2.28

Workday presently has a consensus price target of $253.27, indicating a potential upside of 81.71%. GoodRx has a consensus price target of $17.31, indicating a potential upside of 183.23%. Given GoodRx’s higher possible upside, analysts clearly believe GoodRx is more favorable than Workday.

Summary

Workday beats GoodRx on 9 of the 14 factors compared between the two stocks.

About Workday (Get Rating)

Workday, Inc. provides enterprise cloud applications worldwide. Its applications help its customers to plan, execute, analyze, and extend to other applications and environments, and to manage their business and operations. The company offers a suite of financial management applications, which enable chief financial officers to maintain accounting information in the general ledger; manage financial processes; identify real-time financial, operational, and management insights; enhance financial consolidation; reduce time-to-close; promote internal control and auditability; and achieve consistency across finance operations. It also provides cloud spend management solutions that helps organizations to streamline supplier selection and contracts, manage indirect spend, and build and execute sourcing events, such as requests for proposals; Human Capital Management (HCM) solution, a suite of human capital management applications that allows organizations to manage the entire employee lifecycle from recruitment to retirement, and enables HR teams to hire, onboard, pay, develop, reskill, and provide employee experiences; Workday applications for planning; and applications for analytics and reporting, including augmented analytics to surface insights to the line of business in simple-to-understand stories, machine learning to drive efficiency and automation, and benchmarks to compare performance against other companies. It serves professional and business services, financial services, healthcare, education, government, technology, media, retail, and hospitality industries. The company was formerly known as North Tahoe Power Tools, Inc. and changed its name to Workday, Inc. in July 2005. Workday, Inc. was incorporated in 2005 and is headquartered in Pleasanton, California.

About GoodRx (Get Rating)

GoodRx Holdings, Inc., through its subsidiaries, offers information and tools that enable consumers to compare prices and save on their prescription drug purchases in the United States. The company operates a price comparison platform that provides consumers with curated, geographically relevant prescription pricing, and access to negotiated prices through GoodRx codes that are used to save money on prescriptions across the United States. It also offers other healthcare products and services, including subscriptions, pharma manufacturer solutions, and telehealth services. It serves pharmacy benefit managers that manage formularies and prescription transactions, including establishing pricing between consumers and pharmacies. The company was incorporated in 2015 and is headquartered in Santa Monica, California.

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