This Top ERP Cloud Company Reaches Profitability
Stocks that have transitioned from losses to profitability and generate free cash flow can be lucrative investments. In a previous post, I shared five such ideas.
Since that post was published, all the mentioned stocks have achieved positive gains, albeit to varying degrees. The best performer was Crowdstrike, with a 41% gain, followed by Monday.com with a 31% increase. Palantir also delivered a robust return of 24%. Both Datadog and Workday recorded gains of 5%.
In this post, I'd like to focus on Workday, whose stock remains reasonably priced.
Workday specializes in offering cloud-based human capital management (HCM), financial management, and planning software to businesses. This means that companies can leverage Workday for a wide range of operations: from recruiting and payroll management to leave management, procurement, expense tracking, and budget planning. Essentially, Workday serves as an all-in-one software solution for companies.
You might compare Workday to SAP, often regarded as the godfather of Enterprise Resource Planning (ERP). However, Workday sets itself apart by being cloud-based, in contrast to the traditional on-premise ERP systems where a company must maintain its IT infrastructure internally. Instead, Workday oversees the software's delivery, offering a more streamlined and maintenance-free solution for businesses.
Even SAP recognizes the advantages of cloud computing and is in the process of transitioning to the cloud. This shift is crucial for remaining relevant and competitive. As a cloud-native entity from its inception, Workday is inherently ahead, unencumbered by the need to overhaul legacy systems. This positions Workday as a forward-thinking choice for companies seeking modern, efficient software solutions.
In fact, Gartner reports that Workday held a leading 21% market share in 2022 for ERP Software as a Service (SaaS) revenue, beating both SAP and Oracle. This statistic specifically considers cloud-based revenue and excludes on-premise revenue; when the latter is included, SAP surpasses Workday due to its larger footprint in on-premise solutions.
