Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
Investing.com - Needham maintained its Buy rating and $300.00 price target on Workday (NASDAQ:WDAY) ahead of the company’s annual Analyst Day scheduled for Tuesday, September 16. The target aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $220 to $340, with the stock currently trading at high valuation multiples.
The research firm expects Workday may lower its fiscal year 2027 subscription revenue growth target from the current 15%+ to potentially as low as 13% organically, reflecting recent performance after the company reported 14% subscription revenue growth in its second quarter. This projection aligns with the company’s current revenue growth rate of ~14% over the last twelve months, according to InvestingPro data.
Needham attributes the slower growth to macro-driven slowdowns in ERP migrations that have affected Office of the CFO vendors throughout its coverage universe to varying degrees.
To offset the anticipated lower growth profile, Needham believes Workday will likely raise its operating margin target from the current approximately 30% level.
The firm maintains that Workday’s long-term strategy focuses on revitalizing growth through a differentiated AI approach and rapidly expanding partner initiatives.
In other recent news, Workday’s latest earnings report has drawn varied reactions from analysts. TD Cowen reiterated its Buy rating, highlighting a return to historical contracted remaining performance obligation (cRPO) levels. RBC Capital maintained its Outperform rating with a $340 price target, noting a modest second-quarter beat but unchanged subscription revenue guidance. Piper Sandler, however, lowered its price target to $220, citing a mixed outlook despite results being "better-than-feared." KeyBanc also adjusted its target to $285 due to concerns about growth trajectory, even though Workday exceeded expectations in several financial metrics. Cantor Fitzgerald maintained its Overweight rating, pointing out that Workday slightly exceeded consensus for revenue, operating margin, and earnings per share. Despite these positive aspects, calculated billings were below expectations. These developments reflect diverse analyst perspectives on Workday’s financial performance and future prospects.
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