Analyzing King Digital Entertainment (KING) & Workday (WDAY)

King Digital Entertainment (NYSE: KING) and Workday (NASDAQ:WDAY) are both mid-cap technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares King Digital Entertainment and Workday’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
King Digital Entertainment N/A N/A N/A $1.75 10.29
Workday $1.57 billion 13.15 -$408.27 million ($1.44) -68.89

King Digital Entertainment has higher earnings, but lower revenue than Workday. Workday is trading at a lower price-to-earnings ratio than King Digital Entertainment, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares King Digital Entertainment and Workday’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
King Digital Entertainment 19.58% 33.71% 24.95%
Workday -16.91% -19.73% -7.37%

Insider & Institutional Ownership

67.6% of Workday shares are owned by institutional investors. 37.7% of Workday shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for King Digital Entertainment and Workday, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
King Digital Entertainment 0 0 0 0 N/A
Workday 3 21 13 0 2.27

Workday has a consensus price target of $103.27, suggesting a potential upside of 4.11%. Given Workday’s higher probable upside, analysts clearly believe Workday is more favorable than King Digital Entertainment.

Summary

Workday beats King Digital Entertainment on 5 of the 9 factors compared between the two stocks.

King Digital Entertainment Company Profile

King Digital Entertainment plc is an interactive entertainment company for the mobile world. The Company has four franchises: Candy Crush, Farm Heroes, Bubble Witch and Pet Rescue. The Company develops and publishes games that can be played on its king.com and royalgames.com Websites, Facebook and, mobile platforms, such as iOS and Android. The Company is involved in developing and monetizing digital games on multiple platforms. The Company’s games include Candy Crush Saga, Candy Crush Soda Saga, Farm Heroes Saga, Pet Rescue Saga and Bubble Witch 2 Saga. As of December 31, 2014, the Company had 533 million monthly active users (MAUs), 149 million daily active users (DAUs), 356 million monthly unique users (MUUs) and 8,344 million monthly unique payers (MUPs).

Workday Company Profile

Workday, Inc. is a provider of enterprise cloud applications for finance and human resources. The Company delivers financial management, human capital management and analytics applications designed for various companies, educational institutions and government agencies. As part of its applications, the Company provides embedded analytics that capture the content and context of everyday business events, facilitating informed decision-making from wherever users are working. Its applications include Workday Financial Management, Workday Human Capital Management (HCM) and Other Applications. It also provides open, standards-based Web-services application programming interfaces, and pre-built packaged integrations and connectors. Workday Financial Management is a unified application with a range of financial capabilities, relevant analytics and metrics, and auditable process management. Workday HCM allows an organization to staff, pay, organize and develop its global workforce.

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