Workday (WDAY) has received a new Hold rating, initiated by D.A. Davidson analyst, Robert Simmons, CFA.
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Robert Simmons, CFA has given his Hold rating due to a combination of factors influencing Workday’s current market position and future growth prospects. The company’s core Human Capital Management (HCM) business, which constitutes a significant portion of its revenue, is expected to continue growing, albeit at a decelerating rate due to market saturation and increased competition. Although Workday’s Financial Management suite and international operations are anticipated to grow faster than the core business, they have not yet shown substantial impact on overall growth.
Additionally, Workday has successfully developed its cross-sell and up-sell strategies, which have become significant contributors to new bookings. The company’s strong margins are expected to improve further, providing a solid foundation for its stock price. However, the stock is currently trading at a premium compared to its peers on a revenue multiple basis. As a result, Robert Simmons is looking for either a more attractive entry point or evidence of growth acceleration from new initiatives before altering the rating, thus maintaining a Hold position with a $235 price target.
Simmons, CFA covers the Technology sector, focusing on stocks such as Workday, BlackLine, and Onestream, Inc. Class A. According to TipRanks, Simmons, CFA has an average return of -7.9% and a 40.00% success rate on recommended stocks.
In another report released on November 27, TR | OpenAI – 4o also downgraded the stock to a Hold with a $236.00 price target.