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 "WDAY reported upside to revenue and EPS but only maintained their full-year subscription guide on continuing macro headwinds. Sales commentary was sluggish with a flat environment Q/Q but driving lower intermediate term growth assumptions. As a result, Workday is shifting focus to profitability, with mgmt raising its FY27 OM guidance by 500bps to 30%+ even as FY25 revenue assumptions are lowered 250bps. We think the shift is prudent considering the sales environment and headcount growth dynamics. We expect additional details surrounding margin leverage at its Sept. analyst day, believing a significant portion of leverage will come from S&M, where WDAY has aggressively invested in their Fins solution. We do expect this new 15% growth expectations to be a longer lasting goal with law of large numbers suggesting acceleration is less likely."
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Shares of Workday closed at $231.08 yesterday.