How Will Workday Stock React To Its Upcoming Earnings

Workday (NASDAQ:WDAY) is set to report its earnings on Thursday, August 27, 2026. The company has $49 billion in current market capitalization. Revenue over the last twelve months was $9.9 billion, and it was operationally profitable with $1.2 billion in operating profits and net income of $847 million. While the post-earnings stock reaction will depend on how the results and outlook stack up against investor expectations, a detailed look at historical results can aid you if you are an event-driven trader.

Here is how: either understand the historical odds and position yourself prior to the earnings announcement, or look at the correlation between immediate and medium-term returns post earnings and enter a trade after the results announcement.

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Workday's Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 11 positive and 9 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 55% of the time.
• However, this percentage decreases to 36% if we consider data for the last 3 years instead of 5.
• Median of the 11 positive returns = 6.3%, and median of the 9 negative returns = -6.2%

Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

Correlation Between 1D, 5D and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, 5D_21D shows the strongest correlation here, and it is negative: if the 5D post-earnings return is positive, a trader can position themselves in the opposite direction over the following 21D window. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that these correlations are between subsequent windows, not the cumulative columns above: 1D_5D is the correlation between the 1D post-earnings return and the subsequent return from day 1 through day 5, 1D_21D is between the 1D return and the subsequent return from day 1 through day 21, and 5D_21D is between the 5D return and the subsequent return from day 5 through day 21.

Is There Any Correlation With Peer Earnings?

Sometimes, peer performance can have an influence on post-earnings stock reaction. Some of that pricing-in may even begin before the earnings are announced. Here is some historical data on the past post-earnings performance of Workday stock compared with the stock performance of peers that reported earnings just before Workday. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.

* N/A indicates no peer earnings release occurred within 30 days prior to the earnings date.

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