Out Fox The $treet

Workday has traded sideways for a couple of years as multiple compression takes over. Investors shouldn't be fooled by high analyst price targets with the negative trend towards lower targets. The stock faces more multiple compression going forward that will impact price gains. The tech sector is littered with stocks over the last couple of years that came public at excessive valuations and headed higher for awhile. The market justified these sky-high prices due to fast growth rates and a new paradigm in cloud computing or social media. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Demand for software companies that cater to business clients remains strong, but not enough workdays exist in a year to make Workday (NYSE: WDAY ) attractive at current market multiples. The company went public in mid-October at highly unappealing multiples that left limited upside ever since. The provider of enterprise cloud-based applications for customers to manage critical business functions trades at around 25 times fiscal year 2014 (ending January 2014) revenue more » Disclosure: Long MM. Please review the disclaimer page for more details.