Workday normalized FCF multiple and DCF valuation

Workday Inc. (WDAY)
By@hypertonx
Assumptions as of 2026-08-14
USD
Updated Aug 16, 2026 · Revised 3 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 14, 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 2026-08-14

P/FCF fair value per share
$198.68
P/FCF upside / downside
2.2%
Selected normalized FY2031 P/FCF
18.2
P/FCF required to match market price
17.8
Implied normalized exit FCF yield
5.63%
FY2031E free cash flow
$4.492
Current TTM P/FCF
17.1
Current P/FY2027E FCF
16.0
FY2027E-FY2031E FCF CAGR
9.0%
P/FCF equity value
$52.054
Gordon-growth DCF fair value per share
$205.60
Gordon-growth DCF upside / downside
5.7%

Balance sheet

$1.365USD B

DCF cross-check

2.5%

Historical anchor

$2.972USD B

Market

$194.42USD/share
Latest WDAY quote · updated Aug 25, 2026 2:00 PM MDT
0.262B shares

Operating forecast

FY2027EFY2028EFY2029EFY2030EFY2031E
Free cash flow margin
Total revenue forecastUSD B

P/FCF valuation

18.17553135291106

Valuation

10.0%

Five-year FCF forecast

FY2027EFY2028EFY2029EFY2030EFY2031E
Revenue$10.68$11.59$12.41$13.16$13.82
FCF margin29.8%30.5%31.2%32.0%32.5%
Free cash flow$3.18$3.53$3.87$4.21$4.49
Present value of FCF$2.89$2.92$2.91$2.88$2.79

Sources

  1. Workday maintained FY2027 operating cash flow guidance of $3.450B and capital expenditures of approximately $270M, implying $3.180B of free cash flow, or 15% growth. — s21.q4cdn.com (accessed 2026-08-16)
  2. Q1 FY2027 revenue was $2.542B, free cash flow was $616M, and cash, cash equivalents and marketable securities were $4.353B at April 30, 2026. — sec.gov (accessed 2026-08-16)
  3. FY2026 free cash flow was $2.777B versus $2.192B in FY2025. — sec.gov (accessed 2026-08-16)
  4. WDAY closed at $198.68 on August 14, 2026; the MCP2 provider market-cap snapshot was approximately $52.04B. — modeledge.ai (accessed 2026-08-16)

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