Workiva Inc. (NYSE:WK) Share Price Analysis: Is it Time to Buy?

Workiva Inc. (NYSE:WK) is currently overvalued by 22% based on discounted cash flow valuation, priced at $66.51 compared to an intrinsic value of $54.46. However, the company's future outlook is optimistic with earnings expected to increase by 32% in the upcoming year, leading to more robust cash flows and potentially a higher share value.

Workiva Inc. (NYSE:WK), a leading provider of cloud-based financial close and reporting solutions, is currently trading at $66.51, which is overvalued by 22% based on discounted cash flow (DCF) valuation. The intrinsic value of the stock, as estimated by DCF analysis, is $54.46 [2].

The company's current valuation discrepancy can be attributed to its strong financial performance and optimistic future outlook. Workiva reported a 20% year-over-year (YoY) growth in subscription revenue and a 17% YoY growth in total revenue during the first quarter of 2025, beating the high end of its guidance [1]. Additionally, the company's gross margin improved by 100 basis points YoY, reaching 79%, and maintained a high gross retention rate of 97% [1].

Despite these positive developments, the company's stock price appears to be overvalued compared to its intrinsic value. However, this discrepancy may be justified by the company's strong earnings expectations. Analysts anticipate that Workiva's earnings will increase by 32% in the upcoming year, leading to more robust cash flows and potentially a higher share value [1].

Workiva's stock is currently rated as a "Buy" by 12 brokerage firms, with an average recommendation of 1.5 on a scale of 1 to 5 [1]. The average target price for the stock is $100.58, with a high estimate of $127.43 and a low estimate of $90.00 [1]. The consensus recommendation suggests that the stock is undervalued, but the actual valuation based on DCF analysis indicates that the stock is overvalued.

In conclusion, while Workiva Inc. (NYSE:WK) appears to be overvalued based on DCF analysis, its strong financial performance and optimistic earnings outlook may justify the current stock price. Investors should carefully consider the company's future prospects and the potential impact of regulatory changes and economic uncertainties on its performance.

References:
[1] https://www.gurufocus.com/news/2980190/workiva-wk-target-price-adjusted-by-citi-analyst-ahead-of-earnings-wk-stock-news
[2] https://finance.yahoo.com/news/digitalocean-holdings-inc-nyse-docn-105516863.html