Workday (WDAY - Free Report) came out with quarterly earnings of $0.86 per share, beating the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 28.36%. A quarter ago, it was expected that this maker of human resources software would post earnings of $0.65 per share when it actually produced earnings of $0.84, delivering a surprise of 29.23%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Workday, which belongs to the Zacks Internet - Software industry, posted revenues of $1.11 billion for the quarter ended October 2020, surpassing the Zacks Consensus Estimate by 1.83%. This compares to year-ago revenues of $938.10 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Workday shares have added about 36% since the beginning of the year versus the S&P 500's gain of 10.4%.

What's Next for Workday?

While Workday has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.