Why Has Workday Stock Trailed Cadence?
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Two software companies grew their sales at about the same pace over the last three years. Yet over the five years to November 2026, one stock fell 35.2% while the other gained 84.5%. The stock that fell belongs to Workday (WDAY), which sells HR and finance software, and the stock that rose belongs to Cadence Design Systems (CDNS). So where did Cadence’s lead come from: faster sales growth, bigger profits, or investors paying more?
Who Has Beaten Workday Over Five Years?
Over five years, Workday’s stock held up better than most of its industry, outpacing 60.8% of the 125 application software companies compared.
Still, five companies with similar sales growth, each worth at least $2 billion, beat Workday by 20 points or more over five years. Cadence was one of them, finishing ahead by 119.7 points over five years. The table below places Workday beside two of these peers.
| Company | Sales growth, 3-year average | P/E | 1-year | 3-year | 5-year |
|---|---|---|---|---|---|
| Workday (WDAY) | 14.8% | 37.3x | -15.5% | -17.3% | -35.2% |
| Cadence Design Systems (CDNS) | 16.1% | 66.7x | 3.5% | 28.7% | 84.5% |
| Agilysys (AGYS) | 16.6% | 78.6x | -1.7% | 42.8% | 140.6% |
Total return to 2026-11-09, including dividends. Companies in Application Software whose sales grew within 4 points of WDAY’s. P/E: latest close over the last four quarters’ earnings per share.
Agilysys (AGYS), which sells software to the hospitality industry, is further ahead still, by 175.8 points, so Cadence is not the only company with similar sales growth to beat Workday.
Did Cadence Grow Faster Than Workday?
Only a little, and not over five years. Over the last three years, Cadence grew its sales about 1.3 points a year faster than Workday, putting the two companies at nearly the same pace. Between 2021 and 2026, Workday’s revenue rose 117.3%, compared with 106.1% for Cadence.
Cadence sells software, hardware and design blocks that companies use to design and verify chips. Even though the two companies sell very different things, their sales grew at a similar rate, meaning faster growth does not explain Cadence’s lead.
Where Did The Gap Come From?
The gap came from what investors pay, not from profits. Between 2021 and 2026, Workday moved from an operating loss to an operating profit, marking a 14.7-point swing in operating margin. This compared with a 3.5-point gain for Cadence. Over those years, Cadence’s profit per share rose 102.8%, running about in step with its sales.
Because Workday had no profit in 2021, the fair yardstick for both companies is what investors paid for each dollar of sales. In 2021, those figures were close to each other: 12.6 times for Workday and 13.9 times for Cadence.
Workday’s sales multiple fell 76.6% between June 2021 and June 2026, while Cadence’s rose 6.0% between September 2021 and September 2026. Those dates differ from the end date of the stock returns, so the two sets of figures do not line up exactly. Workday’s business became more profitable, yet by 2026 you paid far less for each dollar of Workday’s sales.
Workday gets most of its sales from subscription services, 92.5% in fiscal 2026. On the fiscal Q2 2027 call, management said Workday continues to put AI first in its spending and to seek efficiencies across the business.
What To Watch In Workday’s Next Report
Management expects Workday’s subscription growth to slow. Subscription revenue grew 14% in fiscal Q2 2027, and management guided to growth of 12% for fiscal Q3. For fiscal 2028, management’s current target is about 11%, which matches the rate it expects for the second half of fiscal 2027.
Management also said many of Workday’s new AI products are paid for as customers use them, so their effect on revenue will take months or a year to show. When the company reports in November 2026, Workday’s subscription revenue growth in fiscal Q3 2027 is the figure to watch.
How To Act On WDAY?
Not necessarily on Workday alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from Workday’s own industry that have beaten it. Over the five years to November 2026, Cadence Design Systems stock rose 84.5% and Agilysys stock rose 141%, while Workday stock fell 35.2%.
Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.
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