Oppenheimer Remains Bullish on Workday (WDAY) Ahead of 2Q Report
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Oppenheimer reiterated an Outperform rating on Workday (NYSE: WDAY), and raised the price target to $90.00 (from $80.00), ahead of the company's 2Q earnings report. Industry checks point to a relatively good US software spending environment which should support forecasts. Oppenheimer expects WDAY to report a total revenue of ~ $372M and ($0.03) in EPS. Consensus is ~$373M and ($0.02).
Analyst Brian Schwartz commented, "We think Workday's fundamentals remained solid in F2Q, based on a recent round of industry conversations, though quarterly reported results and guidance are likely to show a moderating beat-and-raise magnitude given tougher billings y/y comparisons, intensified FX headwinds, and conservative guidance stance possibly taken by the company's new CFO, which prompts a restrained near-term tactical view. Conclusion: We remain positive on Workday owing to a dearth among large-cap software stocks of sustainable, strong recurring revenue growers with an improving operating margin profile, like WDAY, and we expect 2Q results to reinforce that the long-term prospects for the business remain sound. Additionally, the business is nearing a profitability and positive FCF business model inflection which could serve as a stock catalyst by enticing a new class of investors. Raise target to $90 (from $80)."
Shares of Workday closed at $79.24 yesterday.
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