Workday normalized FCF multiple and DCF valuation

Workday Inc. (WDAY)
By@hypertonx
Assumptions as of 2026-10-02
USD
Updated Oct 2, 2026 · Revised 7 times
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Workday normalized FCF multiple and DCF valuation

Five-year Workday free-cash-flow valuation with two methods. The primary method capitalizes FY2031E FCF at a normalized P/FCF exit multiple and discounts that enterprise value to the present before adding current net cash. The base exit multiple is calibrated to the August 27, 2026 closing price because the user views the current market price as fair. A Gordon-growth DCF remains as an independent cross-check. The calibration is a market-implied assumption, not independent evidence that the market price is intrinsically correct.

as of 2026-10-02

P/FCF fair value per share
$193.57
P/FCF upside / downside
3.7%
Selected normalized FY2031 P/FCF
17.0
P/FCF required to match market price
16.4
Implied normalized exit FCF yield
6.11%
FY2031E free cash flow
$4.479
Current TTM P/FCF
16.2
Current P/FY2027E FCF
14.5
FY2027E-FY2031E FCF CAGR
8.9%
P/FCF equity value
$47.678
Gordon-growth DCF fair value per share
$214.24
Gordon-growth DCF upside / downside
14.8%

Balance sheet

$0.414USD B

DCF cross-check

2.5%

Historical anchor

$2.844USD B

Market

$186.59USD/share
Latest WDAY quote · updated Oct 9, 2026 2:00 PM MDT
0.246B shares

Operating forecast

FY2027EFY2028EFY2029EFY2030EFY2031E
Free cash flow margin
Total revenue forecastUSD B

P/FCF valuation

16.99644401102041

Valuation

10.0%

Five-year FCF forecast

FY2027EFY2028EFY2029EFY2030EFY2031E
Revenue$10.66$11.55$12.37$13.12$13.78
FCF margin29.8%30.5%31.2%32.0%32.5%
Free cash flow$3.18$3.52$3.86$4.20$4.48
Present value of FCF$2.89$2.91$2.90$2.87$2.78

Sources

  1. October 2 Model Edge reference WDAY quote $186.14, refreshed 2026-10-02T17:10:06.034296-06:00. Price alone is not evidence to change operating forecasts; BRUN separately refreshes the existing peer-relative valuation. (accessed 2026-10-02)
  2. October 1 credit agreement replaces the $1B revolver with a $1.5B facility maturing October 2031. The 8-K explicitly reports zero outstanding borrowings as of October 1. Do not add facility capacity to cash/debt or reprice the deliberate P/FCF calibration merely from market movement. Preserve $3.180B guided FCF and $193.57 value. Duffield's Form 144 proposes a sale of 98,446 existing shares. Separate SaaS row remains unbound. — modeledge.ai (accessed 2026-10-02)
  3. September 29 Modeledge reference WDAY stock price $189.17, retrieved 2026-09-29T15:15:03.332082-06:00; a post-session reference snapshot, not an asserted official close. No operating or intrinsic valuation inputs changed in this review. (accessed 2026-09-29)
  4. September 29 8-K: functions reorganize with approximately 2.5% workforce reduction and office consolidation. $65M-$80M total charges include $40M-$55M future cash costs, $10M noncash SBC and $15M lease impairment. FY2027 Q3/full-year guidance is reaffirmed except GAAP operating margin; charges are excluded from non-GAAP measures. Preserve $3.180B FCF, existing revenue/margin path, net-cash anchor and P/FCF calibration. Do not capitalize severance as a recurring expense, add unquantified savings or separately deduct costs already included in reaffirmed FCF. Payment timing/10-Q reconciliation remains open. — modeledge.ai (accessed 2026-09-29)
  5. September 28 Modeledge reference WDAY stock price $188.6, retrieved 2026-09-28T16:46:38.417946-06:00; a post-session reference snapshot, not an asserted official close. Operating assumptions are unchanged except separately documented updates. (accessed 2026-09-28)
  6. September 28 Form 144 proposes a Duffield sale of 98,971 existing shares from historical private placement holdings, not new issuer equity or revised guidance. Preserve the current P/FCF valuation and DCF cross-check; the separate SaaS portfolio row remains unbound. — modeledge.ai (accessed 2026-09-28)
  7. Workday Q2 FY2027 revenue was $2.649B, subscription revenue was $2.471B, operating cash flow was $520M, free cash flow was $460M, and cash plus marketable securities was $3.403B at July 31, 2026. — sec.gov (accessed 2026-08-28)
  8. Workday updated FY2027 guidance to total revenue of $10.650B to $10.660B, subscription revenue of $9.940B to $9.950B, non-GAAP operating margin of 31.0%, operating cash flow of $3.450B, capital expenditures of $270M, and free cash flow of $3.180B. — s21.q4cdn.com (accessed 2026-08-28)
  9. Workday repurchased approximately 9.8M shares for $1.3B in Q2 FY2027 and authorized an additional open-ended repurchase program of up to $4.0B. — sec.gov (accessed 2026-08-28)
  10. Q2 FY2027 weighted-average diluted shares were 246.307M and six-month FY2027 free cash flow was $1.076B versus $1.009B in the prior-year period. — sec.gov (accessed 2026-08-28)
  11. Workday reported more than $100M of new ACV from agentic AI, AI ARR of approximately $600M, and more than 5,500 customers using at least one organic agent. — s21.q4cdn.com (accessed 2026-08-28)
  12. WDAY closed at $193.57 on August 27, 2026; the value is used only to calibrate the market-implied base exit multiple. — modeledge.ai (accessed 2026-08-28)

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