Workiva (WK) Could Be 3% Undervalued After Its Pullback

Market reaction to yield spike and oil move

Workiva (WK) fell about 4% in the afternoon session after a jump in benchmark Treasury yields and higher crude oil prices renewed concerns about inflation, putting pressure on growth oriented software stocks.

For context, Workiva’s latest share price of $76.70 comes after a 1 month share price return of 28.26% and a 3 month share price return of 53.89%. The year to date share price return is down 7.56%, and the 5 year total shareholder return is down 48.42%, suggesting that recent momentum has picked up even though longer term holders have faced weaker outcomes.

Stress test your exposure to volatile growth software by comparing Workiva with a curated set of resilient, cash generative companies in our 50 high quality undervalued stocks.

After Workiva’s sharp rebound and the latest pullback, the gap between its US$76.70 share price, analyst targets, and intrinsic value estimates is wide. Where does fair value really land in that spread?

Most Popular Narrative: 3% Undervalued

Workiva’s most followed narrative pegs fair value at $78.73, only slightly above the last close at $76.70, which puts every underlying assumption in focus.

Workiva's focus on multi-solution platform deals and larger contracts, particularly with Fortune 50 and Fortune 100 companies, is anticipated to drive revenue growth through increased account expansion and higher contract values. There is a strong demand for Workiva's sustainability reporting solutions in light of new regulations like the CSRD in Europe, along with a growing market for science-based target reporting, which is expected to enhance their subscription revenues significantly.

Read the complete narrative.

Want to see what is sitting behind that premium revenue story for Workiva? The narrative leans heavily on faster top line growth, rising margins and a richer future earnings multiple. The exact mix of those inputs matters a lot for that $78.73 fair value.

Analysts building this narrative use a 9.37% discount rate on Workiva, assume double digit annual revenue growth and project a clear lift in profitability over time. That combination is what keeps the fair value slightly ahead of today’s share price, even after the recent rally.

Result: Fair Value of $78.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Workiva’s story still depends on regulatory timelines for sustainability rules and on partner delivered implementations, both of which could challenge the current fair value narrative.

Find out about the key risks to this Workiva narrative.

Another View: Workiva looks expensive on earnings multiples

While the narrative and fair value of $78.73 suggest Workiva is slightly undervalued, the P/E picture tells a different story. At 88.7x earnings, the stock trades well above the US Software industry at 31.7x, peers at 59.2x, and a fair ratio of 42.7x. That gap implies meaningful valuation risk if sentiment shifts back toward those lower benchmarks. Which yardstick do you want to lean on more heavily?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment on Workiva split between rich earnings multiples and a supported fair value story, it makes sense to move fast and test the numbers yourself. Balance the potential upside with risks that others are already debating by checking the 3 key rewards and 3 important warning signs.

Looking for more investment ideas beyond Workiva?

If you like the Workiva story but want a broader watchlist, use these focused tools to uncover other stocks that could suit your style before the next move.

• Target potential turnaround opportunities by scanning 22 elite penny stocks with strong financials that already show stronger financial footing than typical low priced stocks.
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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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