Is Workday, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Workday, Inc. has moved from expensive to very expensive, indicating a significant concern regarding its current pricing relative to its earnings potential. The company appears to be overvalued, with a P/E ratio of 101, which is substantially higher than its peers such as Cisco Systems, Inc. at 23.85 and Accenture Plc at 21.26. Additionally, Workday's EV to EBITDA stands at 67.73, which further emphasizes its high valuation compared to the industry norms.
In comparison to its peers, International Business Machines Corp. also shows a very expensive valuation with an EV to EBITDA of 37.98, but Workday's ratios are notably higher, reinforcing the overvaluation narrative. Furthermore, the stock has underperformed against the S&P 500 across multiple time frames, with a year-to-date return of -9.22% compared to the S&P 500's 13.30%, and a one-year return of -3.71% versus 14.08% for the index. This performance suggests that investors may be reassessing the high valuation in light of the company's recent stock performance.