In a report released today, Keith Weiss from Morgan Stanley maintained a Hold rating on Workday, with a price target of $255.00.
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Keith Weiss has given his Hold rating due to a combination of factors impacting Workday’s current market position. Despite trading at a relatively low multiple of 18 times free cash flow, the upcoming quarter is not expected to bring upward revisions to estimates, largely due to an aggressive setup for the second half of the year. This cautious outlook is compounded by ongoing concerns about growth deceleration and the potential pricing disruption posed by AI advancements.
Investors are eager for signs of stabilization in Workday’s revenue and growth outlook, especially after a challenging first quarter and two years of reduced growth estimates. While channel checks suggest that the second quarter might perform better than feared, the expectations for subscription revenue growth in the second half of the fiscal year appear ambitious. The market’s current sensitivity to AI-related uncertainties further complicates the situation, leaving key bear concerns regarding medium-term growth and AI disruption risks unresolved.
According to TipRanks, Weiss is a 5-star analyst with an average return of 12.8% and a 64.02% success rate. Weiss covers the Technology sector, focusing on stocks such as Microsoft, Adobe, and Intuit.