Workday's HCM Solutions To Aid Wells Fargo With HR Overhaul

Workday, Inc. (NASDAQ:WDAY) is gaining traction in Human Capital Management (HCM) space. The company’s HCM solutions have recently been adopted by Wells Fargo & Company (NYSE:WFC) in a bid to enhance HR capabilities and improve employee experience.

Workday’s Adaptive Insights Business Planning Cloud, Prism Analytics, Payroll, Time Tracking and Recruiting, are other solutions, which have been selected by Wells Fargo.

Wells Fargo seeks to utilize Workday’s cloud-based solutions to efficiently analyze, interpret and undertake machine learning-driven business decisions.

Evolution of work practices call for an efficient HCM system with sturdy capabilities to enhance workforce productivity, manage diverse employee base, and comply with complexity in HR regulations.

This is bolstering the demand for Workday’s HCM and financial management solutions, which bodes well for the company’s top line, going ahead.

Expanding Clientele Holds Promise

Workday is benefiting from robust adoption of its enterprise-level software solutions across financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.

Workday’s HCM suite of applications exhibits strong growth momentum driven by the transition of organizations to the cloud. In fact, in the fourth quarter of fiscal 2020, the company witnessed rapid deployment of HCM solution. The company added 16 Global 2000 and 11 Fortune 500 companies in the fiscal fourth quarter.

Notably, organizations ranging from medium-sized businesses to Fortune 50 enterprises have opted for Workday solutions.

An expanding clientele is expected to provide the company a competitive edge in the HCM market, which per research firm MarketsandMarkets, is anticipated to hit $26.5 billion by 2024 from $16.7 billion in 2019 at a CAGR of 9.7%.

Moreover, Gartner predicts spending on enterprise software to hit $560 billion in 2021, indicating year-over-year growth of 10.5% over $507 billion estimated in 2020.

Workday is leaving no stone unturned to capitalize on the aforementioned growth opportunities, by strengthening portfolio with product enhancements and acquisitions. Markedly, the company concluded the acquisition of Scout RFP in fourth-quarter fiscal 2020. The buyout is anticipated to aid customers in enhancing source-to-pay solution and optimize spend.

Nevertheless, growing expenses associated with buyouts and product development amid stiff competition from Oracle (NYSE:ORCL), SAP, Automated Data Processing, and Ceridian, are likely to limit margin expansion at least in the near term.

Zacks Rank & Stocks to Consider

Workday currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Dropbox, Inc. (NASDAQ:DBX) and Garmin Ltd. (NASDAQ:GRMN) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Dropbox and Garmin is currently pegged at 22.2% and 7.35%, respectively.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>