Workday, Inc. (NASDAQ: WDAY) Gets Citi's Price Target Boost To $274 Amid Positive Earnings Report
On Friday, Citi raised its price target for Workday, Inc. (NASDAQ: WDAY) to $274 from $255, maintaining a Neutral rating on the stock. The adjustment comes after Workday's latest earnings report, which showed a slight beat on expectations and a steady forecast for subscription revenue. The company also announced a slight improvement in the fiscal year operating margin guidance.
However, Workday's forward-looking indicators displayed some weakness, with billings falling short and third-quarter cRPO growth anticipated to be lower than expected. Despite this, management provided a new mid-term outlook, revising growth expectations and projecting a quicker margin increase by the end of FY27.
Even with the positive margin expectations, Citi remains neutral on Workday's shares due to the challenging deal-making environment and the stock trading at a high multiple. In other news, Workday reported strong second-quarter performance exceeding analyst expectations, with adjusted earnings per share of $1.75 and revenue of $2.09 billion.
Analysis:
- Workday's balance sheet strength is highlighted by holding more cash than debt.
- The company is expected to be profitable this year.
- Trading at a high earnings multiple with a premium valuation.
- Low price volatility may appeal to investors seeking stability.
- Solid revenue growth over the last twelve months indicates healthy business expansion.
Overall, while Workday has shown positive financial health and market performance, investors should consider the high valuation and potential risks before making investment decisions. For more in-depth analysis, check out InvestingPro's dedicated page for Workday.