WORKIVA INC (WK): what the price requires
At today's price, WORKIVA INC (WK) is priced for +7.2% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/WK
Headline
| Field | Value |
|---|---|
| Ticker | WK |
| Company | WORKIVA INC |
| Current price | $54.43/sh |
| Composition | Subscription and support 92% / XBRL professional services 7% / Other services 1% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | revenue-multiple |
| EV / sales paid | 4.1x |
| Steady-state operating margin assumed | 31.4% |
| Implied growth | 7.2% |
The company earns no operating profit yet; the inversion runs on the revenue multiple and an assumed steady-state margin.
Solve inputs: computed at a 10% cost of capital with 4% terminal growth over a 5-year stage, holding a 31.4% terminal operating margin (78.5% gross margin x the 40% mature-conversion prior); each 1pp of cost of capital moves the implied revenue growth ~5.6pp.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -5.54σ |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | — | 0 | — |
| Earnings | 4.59x | 2 | expensive |
| Relative | 5.32x | 4 | expensive |
| Growth | 0.63x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.6%); the inversion above states its own rate.
Per-Model Detail (n=9)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $149.79 | 0.36x | yes | FCF base $0.2B, growth 20% (input: historical growth), terminal g 4.0%, WACC 7.6%, 7yr projection |
| DCF Exit Multiple | Growth | $85.97 | 0.63x | yes | Exit EV/EBITDA: 429.3x / 431.3x / 433.3x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $11.84 | 4.60x | yes | P/E 77x (blended: static sector reference 35x + trailing (TTM) 224x), scenarios: 62.5x / 77.0x / 91.5x (bear / base = reference held flat / bull), EV/EBITDA 55x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | — | — | no | — |
| Two-Stage Excess Return | Asset | — | — | no | — |
| Discounted Future Market Cap | Growth | $61.81 | 0.88x | yes | Rev $0.9B, growth 20% (input: historical growth; tapered), Terminal P/S: 2.8x / 3.4x / 4.1x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $2.88 | 18.90x | yes | EPS $0.24, growth 1% (input: historical EPS growth), PEG=167.93 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | $0.01 | 5442.50x | yes | EBITDA $0.01B × sector EV/EBITDA 25.0x (excluded from median) |
| FCF Yield | Earnings | $25.39 | 2.14x | yes | FCF $171.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $2.51 | 21.68x | yes | SBC-adj FCF $0.05B (FCF $0.17B − SBC $0.12B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $7.74 | 7.03x | yes | EPS $0.24 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $126.70 | 0.43x | yes | Revenue $0.93B × sector P/S 8.0x |
| PEG Fair Value | Relative | $9.00 | 6.05x | yes | EPS $0.24 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $2.59 | 21.01x | yes | EPS $0.24 / required return 9.3% (Rf 4.3% + ERP 5.0%) (excluded from median) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $81.7m |
| Interest coverage | -2.9x |
| Share count CAGR (dilution) | 2.7% |
| Burning cash | no |
Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.
Bullet Takeaways
- Workiva has turned the margin corner: Q1 2026 revenue grew 20 percent to about 247 million dollars and non-GAAP operating margin reached 18.4 percent, a 1,600-basis-point improvement, with full-year free-cash-flow margin guided near 20 percent.
- The recurring base is sticky and regulation-driven: 97 percent gross retention, 112 percent net retention, and about 6,665 customers, with demand tied to mandated reporting under standards like Basel and Federal Reserve, EBA, and ECB requirements (FY2025 10-K, accession 0001445305-26-000016).
- Only the forward-growth valuation frame reaches the price while asset, earnings-power, and peer-multiple frames call it expensive, so the stock is a duration bet on durable compounding that carries no current-earnings or asset floor if growth fades or rates stay high.
Bull Case
Workiva sits at the transition point between a growth company and a profitable one, and that stage is the lens through which the numbers should be read. The company is no longer pre-product or pre-scale; it is a 20-percent-grower that has just turned the corner on margins. First-quarter 2026 revenue rose 20 percent to about 247 million dollars, subscription and support revenue rose 21 percent, and non-GAAP operating margin reached 18.4 percent against a GAAP operating margin of 6.2 percent, a 1,600-basis-point improvement that shows the operating leverage is finally arriving. For a business at this stage, the relevant question is not whether it grows but whether growth converts to cash, and the full-year guide for roughly 20 percent free-cash-flow margin says it does.
The revenue base is unusually sticky, which is what makes the durability bet credible rather than hopeful. Workiva reported gross retention of 97 percent and net retention of 112 percent on about 6,665 customers, and it builds its net-retention metric on subscription and support revenue including up-sell, cross-sell, and pricing on multi-year renewals (FY2025 10-K, accession 0001445305-26-000016). The company treats total customer count as a key indicator of future revenue potential because a customer is typically a parent company embedding the platform into its reporting workflow (FY2025 10-K, accession 0001445305-26-000016). Once a finance, audit, or compliance team builds its regulated filings on Workiva, switching means re-engineering a process regulators scrutinize, which is the source of the 97 percent gross retention.
The stage also explains the valuation posture. Among the valuation families, only the growth-based discounted cash flow reaches today's price; the asset, earnings-power, and peer-multiple frames all read the stock as richly valued. That is the signature of a company whose value lives in durable compounding that static, single-period frames structurally cannot capture. With net cash on the balance sheet, retention near best-in-class, AI-driven workflow features rolling into the governance-risk-compliance platform, and a full-year revenue guide above one billion dollars, the bull case is that Workiva keeps compounding subscription revenue at scale while margins widen, exactly the path that justifies a forward-weighted multiple.
Bear Case
The variable with the most leverage on Workiva's thesis is regulation, and that cuts both ways. The company's demand is downstream of regulatory complexity: its customers face global standards like Basel and regional requirements from the Federal Reserve, the European Banking Authority, and the European Central Bank, the kind of mandated reporting that drives them to a platform like Workiva (FY2025 10-K, accession 0001445305-26-000016). The bull reads that as a structural tailwind. The bear reads it as concentration risk in the regulatory regime itself. If the pace of new reporting mandates slows, or if a major regime simplifies disclosure rather than expanding it, the secular driver behind 20-percent growth softens, and a company priced for durable compounding has the most to lose when the compounding rate steps down.
The profitability is also thinner than the headline growth suggests. On a trailing basis the company-level operating result hovers near breakeven, and the cost base keeps climbing: the filing details cost-of-revenue increases driven by higher cash compensation, additional stock-based compensation, more licensed platform content, and rising intangibles amortization (FY2025 10-K, accession 0001445305-26-000016). Stock-based compensation is the recurring tell. The reported free-cash-flow yield looks modest at the cost of equity, but once stock comp is netted out the share-comp-adjusted cash figure shrinks sharply, which means a meaningful slice of the cash story is being funded by dilution rather than pure operating cash. Net retention of 112 percent is good, but it is not the 120-plus that the best enterprise-software compounders post, so the expansion engine has a ceiling.
Valuation is where the macro and rate sensitivity bite hardest. Because only the forward-growth frame supports the price while every static method calls it expensive, the stock is a duration asset: its value is concentrated in cash flows many years out, exactly the cash flows that get discounted most severely when rates rise or when the market re-rates software multiples. A blended P/E in the high-double-digits and a peer-multiple read well below the price leave no cushion. If growth decelerates toward the mid-teens, or if a higher-for-longer rate environment compresses the multiple the market is willing to pay for distant compounding, the downside is structural rather than cyclical, because there is no asset value or current-earnings floor underneath.
Valuation
Workiva's valuation X-ray shows a sharp split, and the split is the whole story. The growth family is the only one that reaches the price: the perpetual-growth discounted-cash-flow read lands well above today's level on a roughly 20 percent growth assumption, and the future-market-cap read sits near the price. Every other family argues the stock is expensive. The peer-multiple frame, anchored to a sector P/E near 35 times, lands far below the price because Workiva's trailing earnings are minimal. The earnings-power and zero-growth cash-flow frames land lower still, since on current profit the business is barely earning its cost of capital.
That pattern has a clean interpretation. The price is a bet on durable compounding that single-period frames structurally cannot price, what amounts to a moat-and-durability premium. The priced-in read on a revenue-multiple basis is within range rather than extreme, which matters: it says the market is not pricing fantasy growth, it is pricing continued execution at roughly the rate Workiva has already demonstrated, with operating margin widening toward the 31-percent kind of level the forward solve implies. The reliability of that solve is reasonable here because the revenue stream is recurring and the retention metrics are strong.
The practical takeaway is that this is a quality-and-duration call, not a value call. Workiva is not cheap on any backward-looking measure, and it is not supposed to be. The investment question is whether 20-percent subscription growth, 97 percent gross retention, and the guided 20 percent free-cash-flow margin persist long enough to grow into the multiple. If they do, the growth frame that reaches the price is the right one. If growth fades or rates stay elevated, the absence of any asset or current-earnings floor means the re-rating could be steep. Position the name as a bet on compounding durability, sized for the volatility a forward-weighted multiple carries.
Catalysts
The near-term catalyst is the guidance trajectory. Workiva guided full-year 2026 revenue to about 1.037 to 1.041 billion dollars, non-GAAP diluted EPS of 2.85 to 2.95 dollars, and free-cash-flow margin near 20 percent, with Q2 revenue of 250 to 252 million dollars. Each quarter is a direct test of whether the 20-percent growth rate and the widening margin both hold, and the Q1 beat (EPS of 0.77 dollars against a 0.65 dollar expectation) sets a credibility bar the next prints must defend. Net retention and large-contract growth are the underlying metrics to watch, because they show whether the expansion engine is accelerating or topping out.
The product roadmap is the second catalyst. Workiva unveiled the next generation of its governance, risk, and compliance platform with data automation, AI-driven workflows, and real-time assurance tooling for finance, risk, and audit teams. Adoption of those AI features, and whether they translate into higher net retention or new-customer wins, will signal whether Workiva is extending its moat into the AI era or merely keeping pace. Regulatory developments that expand mandated disclosure are a softer, slower catalyst that feeds the demand pipeline over time.
Sources: Workiva announces Q1 2026 financial results, businesswire.com; Workiva Q1 2026 posts profit and 2026 guidance, stocktitan.net; Workiva Q1 2026 earnings call transcript, fool.com; Workiva analyst ratings and price targets, public.com.
Peer Cohorts (Per Segment, With Filing Citations)
Workiva (whole company) (reported)
- INTA (Intapp, Inc.)
- (no filing in the citation store)
- GWRE (Guidewire Software, Inc.)
- (no filing in the citation store)
- QTWO (Q2 Holdings, Inc.)
- (no filing in the citation store)
- ALKT (ALKAMI TECHNOLOGY, INC.)
- (no filing in the citation store)
- CLBT (Cellebrite DI Ltd.)
- (no filing in the citation store)
- DT (Dynatrace, Inc.)
- (no filing in the citation store)
- CVLT (Commvault Systems, Inc)
- (no filing in the citation store)
- HUBS (HubSpot, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.