Does Workiva’s $90 Price Reflect Its Growth Prospects After Recent ESG Reporting Momentum?

• If you are wondering whether Workiva at around $90 is a hidden opportunity or a value trap, this article will walk you through what the numbers are really saying about the stock.
• The share price has slipped 1.7% over the last week but is still up 7.0% over the past month. Longer term returns are mixed, with the stock down 10.5% over 1 year yet still delivering around 16% annualized over 3 to 5 years.
• Recent headlines have focused on Workiva's expanding role in regulatory and ESG reporting, with the platform increasingly embedded in how large enterprises manage complex compliance workflows. At the same time, market commentary has highlighted rising competition in cloud based reporting tools, which has sharpened investor debate about how much growth to price into the stock.
• Right now Workiva scores a 3/6 on our valuation checks, suggesting the market might be fairly cautious about its future cash flows. Next we will break down what different valuation approaches say about that score, and then finish with a more intuitive way to think about whether the current price makes sense.

Find out why Workiva's -10.5% return over the last year is lagging behind its peers.

Approach 1: Workiva Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and then discounting those back to today to reflect risk and the time value of money.

For Workiva, the latest twelve month Free Cash Flow is about $130 million, and analyst based forecasts plus extrapolations suggest this could rise to roughly $689 million by 2035. These projections are built using a 2 Stage Free Cash Flow to Equity model, where the first few years rely more heavily on analyst estimates and the later years are grown using gradually slowing assumptions from Simply Wall St.

When all those future cash flows are discounted back, the intrinsic value for Workiva comes out near $142.52 per share, compared with a current price around $90. That implies the shares trade at roughly a 36.3% discount to the modelled fair value, which indicates potential upside if the cash flow path is broadly achieved.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Workiva is undervalued by 36.3%. Track this in your watchlist or portfolio, or discover 927 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Workiva.

Approach 2: Workiva Price vs Sales

For a business like Workiva that is still emphasizing growth and reinvestment, the price to sales ratio is often a more practical yardstick than earnings based metrics. It focuses on what investors are paying for each dollar of revenue before accounting quirks and aggressive investment spending.

In general, higher growth and lower perceived risk can justify a higher sales multiple. Slower growth or greater uncertainty usually mean a lower, more conservative multiple is appropriate. Workiva currently trades on a price to sales ratio of about 6.0x, which is above both the broader Software industry average of around 4.8x and the peer group average near 4.1x.

Simply Wall St also calculates a Fair Ratio of 6.29x for Workiva. This is a proprietary estimate of what a reasonable price to sales multiple should be once you factor in the company’s growth outlook, profitability profile, risk, industry positioning and market cap. Because this Fair Ratio is tailored to Workiva’s fundamentals, it offers a more nuanced benchmark than simple peer or industry comparisons. With the actual multiple of 6.0x sitting slightly below the 6.29x Fair Ratio, the shares screen as modestly undervalued on this metric.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1439 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Workiva Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework that connects the story you believe about Workiva to a concrete forecast for its revenue, earnings and margins, and then to an estimated fair value you can compare with today’s share price.

On Simply Wall St’s Community page, Narratives let you spell out why you think Workiva will win or struggle, translate that view into financial assumptions, and instantly see what price range those assumptions justify, making it much easier to consider whether the current price suggests buying, holding, or selling.

Because Narratives are updated dynamically whenever new information such as earnings, guidance changes, product announcements or activist campaigns is released, your fair value view evolves in real time instead of staying locked to an out of date spreadsheet.

For example, some investors might build a bullish Workiva Narrative that supports a fair value near the high end of recent targets around $106.90. More cautious investors, focusing on governance risks and execution uncertainty, might anchor their Narrative closer to the lower end near $85. Both perspectives can coexist transparently on the platform.

Do you think there's more to the story for Workiva? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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