Shares of human-resources software maker Workday (NASDAQ: WDAY) took a significant hit, tumbling 13.8% during trading hours on Friday, following the release of their first-quarter 2024 earnings report. Despite beating expectations, concerns over future growth and a significant gap between adjusted earnings and GAAP earnings seem to have spooked investors.

Leading up to the earnings announcement, analysts had projected Workday to earn $1.58 per share on sales of $1.97 billion. Surpassing revenue expectations, the company reported sales of $1.99 billion and exceeded the per-share estimate, earning $1.74. However, there was a disparity between the adjusted earnings and GAAP earnings.

The adjusted earnings of $1.74 per share were higher than anticipated, offering a positive outlook. This was especially significant considering the company had earned $0.00 per share in the first quarter of 2023. However, a closer look at the GAAP earnings revealed that Workday earned only $0.40 per share. This discrepancy had a negative impact on investor sentiment.

One aspect that worried investors was that Workday's backlog of subscription work grew by only 17.9%, indicating potential slower revenue growth in the future. Confirming these concerns, management issued a warning that subscription revenue growth for the year would likely be around 17%, amounting to approximately $7.7 billion. The second-quarter subscription-revenue growth is expected to be 17% as well, reaching $1.9 billion. These figures fell slightly below Wall Street's expectations, adding to the stock's decline.

Despite the current market reaction, Workday's stock valuation remains attractive. With a price-to-earnings ratio of 50 and a more reasonable price-to-free-cash-flow ratio of 34.5, the stock is not excessively overvalued. Additionally, long-term forecasts indicate a projected annual profit growth rate of approximately 20% over the next five years.

Although any setback in growth could have a significant impact on the stock price, Workday's current valuation suggests it could become an attractive buying opportunity if it falls further. Investors should carefully consider these factors before making any investment decisions.

However, it is worth noting that The Motley Fool Stock Advisor analyst team recently did not include Workday in their list of the 10 best stocks for investors to buy now. The team believes that those 10 selected stocks have the potential to produce substantial returns in the coming years.

Workday stock's decline today reflects investor concerns about future growth prospects and the gap between adjusted earnings and GAAP earnings. Nevertheless, the stock's valuation and long-term growth potential suggest that it may still be a viable investment option for those who are willing to take calculated risks.