What happened

Shares of Workday (WDAY 2.10%) slumped 10.3% in September, according to data from S&P Global Market Intelligence. Last month's sell-off followed a 32.5% gain for the stock in August. 

^SPX Chart

^SPX data by YCharts

There wasn't much in the way of business-specific news driving the pullback for Workday stock last month. The cloud-based enterprise software company got hit amid a sell-off for the broader market and a pullback for growth-dependent tech stocks, but its share price is still up roughly 38% in 2020. 

A person using a laptop.

Image source: Getty Images.

So what

Workday stock hit a record high in August following better-than-expected second-quarter results and improved full-year guidance, but the stock retraced some gains in September amid a pullback for the broader market. A surge of new coronavirus cases in Europe and the absence of a new stimulus bill in the U.S. added new sources of uncertainty into the market, and many otherwise high-flying, growth-dependent technology stocks posted substantial stock declines in the month's trading.

Now what

Workday stock has seen positive momentum early in October's trading, gaining roughly 3% in the month so far. 

WDAY Chart

WDAY data by YCharts

Workday is facing some near-term headwinds because economic uncertainty is making it more difficult to add new customers. However, the business's cloud-based human resources and financial services software still has plenty of room for growth over the long term, and the company is still posting solid sales momentum.

In the third quarter, Workday expects subscription revenue to come in between $948 million and $950 million, representing 18.5% growth year over year at the midpoint. Management is guiding for full-year subscription revenue to be between $3.73 billion and $3.74 billion, representing roughly 20.5% year-over-year growth at the midpoint of the target. The business's adjusted operating margin for the year is expected to be 18%.

Workday has a market capitalization of roughly $53.9 billion and trades at 90 times this year's expected earnings.