Needham Reiterates Buy Rating on Workday (WDAY)
Needham analyst Scott Berg reiterated a Buy rating and $350.00 price target on Workday (NASDAQ: WDAY).
The analyst comments "Workday reported upside to 1QF25 revenue and earnings, but lengthening sales cycles and lower renewal growth led to in line cRPO growth in the quarter and lower cRPO/FY25 subscription revenue guidance for 2QF25. cRPO growth of 17.9% was effectively at the guidance midpoint, decelerating from roughly 20%+. 2QFY25 cRPO growth guidance was lowered to 15.5%, highlighting new pressure. Renewal expectations are facing pressure as customers are renewing with less headcount growth that the company has recently experienced. Profitability beat expectations, and the company raised its FY operating margin guidance by 50bps, crediting incremental efficiency efforts. On the positive side, we like the new agreement with the Defense Intelligence Agency as it provides a new opportunity to further penetrate the large Fed. market."
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Shares of Workday closed at $260.90 yesterday.