Workday’s stock was rising on Friday.
Courtesy Workday
Workday delivered solid quarterly results and an upbeat outlook, prompting analysts to raise their targets for the stock price, citing strong demand and the promise of artificial intelligence.
After the market closed on Thursday, the human-resources software provider reported earnings per share of $1.43 from sales of $1.787 billion for its second fiscal quarter, which ended in July. Analysts tracked by
FactSet
were looking for $1.26 per share on $1.774 billion.
Workday
(ticker: WDAY) also raised its guidance for fiscal 2024 subscription revenue to a range of $6.570 billion to $6.590 billion, representing 18% year-over-year growth. It previously expected $6.550 billion to $6.575 billion.
Workday stock was up nearly 3% to $231.42 in premarket trading Friday.
Management said the results were partially driven by early renewals by customers and that it is seeing “tremendous” growth in its Financial Management business, which supports tasks like budgeting and billing for customers. The company ramped up investments in the division about six months ago, hiring more sales staff.
Mizuho analyst Siti Panigrahi kept his Buy rating on the stock but raised his target for the price to $260 from $250. He cited “several levers to drive growth” over the longer term such as new additions in Financial Management, traction in the midmarket, and international growth.
A quarter of Workday’s total revenue comes from its international operations. The company has brought in new leadership for Europe, the Middle East, and Africa. It plans to add resources to the Asia-Pacific and Japan segment, which it said needs “some work.”
Scott Berg from Needham kept his Buy rating and increased his price target to $250 from $220. He sees an opportunity to make money through artificial intelligence given the enormous amount of data within the platform.
Write to Karishma Vanjani at [email protected].
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