Tech Sector Soars, But One Undervalued Gem Stands Out
The tech sector is on fire, with the Nasdaq Composite surging 30% this year. While many big-name tech stocks are riding the wave, one hidden gem is bucking the trend. Workiva, a software company that helps businesses streamline data aggregation and reporting, has seen its stock plummet 42% from its all-time high in 2021.
A Unique Solution for Businesses
Workiva’s cloud-based platform plugs into leading productivity and storage applications, aggregating data onto one dashboard. This eliminates the need for managers to track data through individual pieces of software, making it easier to monitor progress, gather data, and compile reports. With hundreds of templates available, Workiva simplifies the process of creating reports for executives and submitting regulatory filings to the Securities and Exchange Commission.
ESG Reporting: A Growing Opportunity
Workiva is now leveraging its expertise to focus on environmental, social, and governance (ESG) reporting, a rapidly growing global opportunity. As governments introduce new rules requiring organizations to report their impact on the environment and society, Workiva’s ESG tool helps businesses track carbon emissions, workforce diversity, and similar metrics.
Strong Financial Performance
Workiva recently reported a record $186 million in total revenue for the third quarter of 2024, a 17% increase from the previous year. The company’s highest-spending customers are driving growth, with a significant increase in customers with annual contract values of at least $100,000, $300,000, and $500,000. Management has also been careful to control costs, resulting in a significant improvement in the company’s bottom line.
Wall Street’s Verdict
The majority of analysts tracked by The Wall Street Journal have assigned Workiva the highest-possible buy rating, with an average price target of $104.3, representing a 14.3% upside from the current stock price. No analysts recommend selling, and the Street-high target is $120, implying a 31.1% upside.
A Long Runway for Growth
With a market capitalization of just $5.1 billion, Workiva has a long runway for growth. Management estimates the company’s financial opportunity at $35 billion across financial reporting, ESG reporting, compliance reporting, and more. As the company continues to execute on its strategy, its stock could exceed even the high end of Wall Street’s forecasts over the long term.
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