TD Cowen analyst Derrick Wood maintained a Buy rating on Workday today and set a price target of $280.00.
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Derrick Wood’s rating is based on several positive indicators for Workday’s performance and potential. The company has shown resilience in navigating challenges within the Higher Education sector, while demonstrating strong execution in the Technology, Media, and Telecom (TMT) and Financial Services (FS) sectors. Additionally, Workday’s traction in artificial intelligence is promising, contributing to a notable portion of its annual recurring revenue growth.
Furthermore, Workday’s valuation appears attractive, with an enterprise value to free cash flow ratio that suggests potential for growth. Despite some concerns about headcount trends, management has provided reassurances, highlighting contract protections and opportunities for product cross-selling. The company’s recent acquisitions, particularly in AI, are performing well and are expected to drive further revenue growth. These factors combined underpin Derrick Wood’s Buy rating for Workday’s stock.
In another report released today, Barclays also maintained a Buy rating on the stock with a $280.00 price target.