1 Glorious Growth Stock Down 47% You'll Wish You'd Bought on the Dip, According to Wall Street

Running a global organization is becoming increasingly complex. Managers are tasked with overseeing remote employees who are working across dozens of digital applications, so chasing down valuable data can be a time-consuming ordeal. Workiva (NYSE: WK) developed a platform to help ease that workload.

Workiva recently reported its financial results for the fourth quarter of 2024, and the company delivered accelerating revenue growth driven by some of its biggest customers. Its stock soared by as much as 8% in after-hours trading following the results, but it remains 47% below its record high which was set during the tech frenzy in 2021.

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That might spell opportunity for investors. In fact, The Wall Street Journal tracks 11 analysts who cover Workiva stock, and they are overwhelmingly bullish on its prospects.

Image source: Getty Images.

Helping organizations unify their valuable data

Managers need to compile reports for a number of reasons, whether they are updating their executive team or submitting forms to a regulatory agency. Those reports require data that is often scattered across the organization's digital applications, so managers would usually need to manually open each one to find the information they need -- unless they use Workiva.

Workiva's platform integrates with most systems of record, cloud storage applications, performance management software, and accounting systems, and allows managers to pull all of their data onto one dashboard. That means they don't have to track data through each individual piece of software -- whether employees are using Microsoft Excel or Salesforce, it can be aggregated into Workiva.

From there, managers can access hundreds of templates through Workiva to help them rapidly compile reports. This is especially useful for publicly traded companies and highly regulated organizations like financial institutions, which need to regularly submit forms to agencies like the U.S. Securities & Exchange Commission.

Workiva is also tackling an enormous reporting opportunity in the environmental, social, and governance (ESG) space, which, according to global consulting giant PwC, could be worth almost $15 billion annually. The company's ESG platform helps businesses collect data, design frameworks, and compile reports so they can track their carbon emissions and other sustainability metrics.

This is becoming increasingly important as governments all over the world continue introducing new rules requiring organizations to track their impact on the societies and environments in which they operate.

Accelerating revenue growth, driven by the largest customers

Workiva generated $199.9 million in total revenue during the fourth quarter, which was a 20% increase from the year-ago period. It marked the second consecutive quarter that growth accelerated, which speaks to the company's momentum.

A combination of increased spending from existing customers and the acquisition of new customers contributed to the strong Q4 result. Workiva's net revenue retention rate increased by 2 percentage points to 112%, and a record 70% of its customers are now using at least two of its products, which jumped from 64% a year ago.

Workiva ended Q4 with 6,305 total customers, which was an increase of just 4.3% year over year. However, the number of customers with annual contract values (ACVs) of $100,000, $300,000, and $500,000 grew significantly faster, which highlights the value Workiva's software brings to larger, more complex organizations:

Image source: Workiva.

Workiva is also inching closer to generally accepted accounting principles (GAAP) profitability. The company still lost $55 million during 2024, but that was a 56% reduction from its $127.5 million net loss in 2023. A mixture of accelerating revenue growth and careful expense management contributed to the improvement at the bottom line.

On a non-GAAP (adusted) basis, which strips out one-off and noncash expenses like stock-based compensation, Workiva was actually profitable in 2024 to the tune of $53.5 million, which was a positive swing from its $22.8 million loss in 2023. This isn't considered "true" profitability because of all the exclusions, but it proves the company is heading in the right direction.

Wall Street is bullish on Workiva stock

The Wall Street Journal tracks 11 analysts covering Workiva stock, and eight of them have assigned it the highest-possible buy rating. The remaining three are in the overweight (bullish) camp, and none recommend selling.

Their average price target is $119.78, which implies the stock could soar by 39% over the next 12 to 18 months. The Street-high target of $132 suggests the stock might even climb by as much as 52% instead.

Workiva stock is still down 47% from its all-time high, which was set during 2021. It was somewhat expensive back then considering its price-to-sales (P/S) ratio soared above 20. However, the company has grown its revenue significantly over the last four years, helping to push its P/S ratio down to a more reasonable level of 6.5.

That's actually a 12% discount to its long-term average P/S ratio of 7.4:

WK PS Ratio data by YCharts

Looking beyond the next 12 to 18 months, it's possible Workiva stock soars even higher than the most bullish of Wall Street's estimates. The company values its addressable market at $35 billion across ESG reporting, financial reporting, compliance, and more, and since its market capitalization is currently less than $5 billion, that leaves plenty of room for growth.

Given Workiva's accelerating quarterly revenue growth and its current valuation, its stock could be a great long-term buy for investors.

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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Salesforce, and Workiva. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.