UBS Reiterates Buy on Workday (WDAY) Following Rising User Conference
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UBS reiterated a Buy rating and $94.00 price target on Workday (NYSE: WDAY) following the company's annual Rising user conference. WDAY gave ample evidence on growth potential, with inherent profitability, and unchanged competitive concerns. Management noted a $4Bn revenue potential by FY21, which implies a 5-yr 28% CAGR.
Analyst Brent Thill commented, "We travelled to Chicago for WDAY's annual Rising user conference. While we didn't sense any fireworks, the understated tone was more WDAY's style, and it was clear to us the underlying current was one of a confident growth outlook. Mgmt noted a $4Bn rev potential by FY21 (not formal guidance), which implies a 5-yr 28% CAGR. FY17 is off to a great start with F1H unbilled subs backlog growth of well over 50% and reiterated goal of >50% for the full year. It certainly seems highly achievable to us with Fin'ls pipeline up >2x in LTM and 3 major pdts just launched (Planning, Learning, Student). We continue to view WDAY as a core holding among SaaS platforms, with Cloud HCM well established, Cloud FM ramping, and platform features enriching, though stock may pause in ST after recent run (+13% YTD) as investors wait for upgraded metrics."
Shares of Workday closed at $89.79 yesterday.
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