UBS Trims PT on Workday (WDAY) to $111; Reflects Recent Multiple Compression in SaaS Comp Group
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Rating Summary:
36 Buy, 23 Hold, 3 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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UBS is cutting its price target on Workday, Inc. (NYSE: WDAY) from $121 down to $111 following Q1 results.
Analyst Brent Thill noted a beat-and-raise
quarter from Workday, much like other SaaS vendors. Customer and deal metrics continue to improve, evidencing vast unmet demand that is filled as WDAY rolls out new functionality & products. In higher education sector, the Student pdt, which will not be complete until end of FY17/CY16, is driving clients to buy the full HCM/Fin’ls suite today. With ORCL & SAP still far behind in the Cloud, we expect WDAY to extend its lead and capture a large share of the $50Bn+ TAM from <$1Bn today,
the analyst said.
Thill's lover price target is based on EV/S 19x (was 23x), using a 210% premium (was 200% premium) to SaaS grp median EV/S 6.1x (was 7.6x), and applied to UBSe revs in 5-8 qtrs (raised & rolled forward). Lower PT reflects recent multiple compression in SaaS comp group. In our view WDAY remains a core holding for Cloud/SaaS.
For an analyst ratings summary and ratings history on Workday click here. For more ratings news on Workday click here.
Shares of Workday closed at $82.13 yesterday.
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