Workday’s Resilience and Strategic Growth: A Buy Rating Amidst Market Challenges

Bernstein analyst Mark Moerdler maintained a Buy rating on Workday (WDAY – Research Report) today and set a price target of $325.00.

Mark Moerdler has given his Buy rating due to a combination of factors, including Workday’s solid quarterly performance and strategic initiatives. The company demonstrated resilience by slightly exceeding expectations in subscription revenue and margins, maintaining its fiscal year revenue guidance, and even raising its margin outlook. Despite the market’s initial negative reaction, Moerdler appreciates the company’s revenue acceleration potential in the latter half of the year, driven by existing deals and operational efficiencies.
Furthermore, Workday’s efforts to enhance its product offerings, particularly through Workday GO and its AI initiatives, are seen as promising avenues for future growth. Moerdler acknowledges that while the immediate growth may not have met investor expectations, the company’s improving margins and stable revenue growth present a compelling value proposition. The shift in valuation methodology and the adjusted price target reflect a more conservative yet optimistic outlook on Workday’s long-term potential.

In another report released today, Jefferies also maintained a Buy rating on the stock with a $325.00 price target.