Workday (WDAY): Good 2Q But Not Enough For Upgrade - Needham
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Needham & Company analyst, Scott Berg, reiterated his Hold rating on shares of Workday (NYSE: WDAY) after 2Q17 results were largely in line with the analyst's expectations of a nominal billings beat.
However, outperformance remains on the lower end of historical ranges in terms of both absolute dollars and percentage beat. The company reported its largest HCM deal in several quarters and improved Financials deal flow. Even with the improvement, the analyst believes Financials growth lags overall pipeline growth. But commentary suggests this could accelerate further in 2H.
The analyst remains on the sidelines as he seeks higher levels of billings outperformance or faster growth in Financials to support incremental multiple expansion from its current valuation of 7x EV/FY17 revenues.
Needham does not have an active price target on WDAY.
Shares of Workday closed at $79.65 yesterday.
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