On Thursday, BMO Capital Markets maintained its Outperform rating on shares of Workiva (NYSE:WK) and increased the stock's price target to $104 from $96. This adjustment comes after the company exhibited a robust third-quarter performance, marked by a notable 26% year-over-year growth in current remaining performance obligations (cRPO).
The financial analyst firm highlighted Workiva's successful rebound from a slowdown experienced over the previous year, reinforcing confidence in the company's ability to achieve high-teens subscription revenue growth in the coming year. The analyst's statement emphasized the strength of Workiva's third-quarter results and the implications for future growth.
Workiva's stock had previously seen a devaluation in terms of a growth-adjusted revenue multiple over the past few quarters. However, following the strong quarterly outcome, BMO Capital anticipates that the stock will recover a portion of this lost value.
The firm suggests that a full recovery in the stock's valuation may hinge on further developments regarding sustainability reporting mandates, which could affect the company's business landscape.
The company's impressive cRPO growth is a significant indicator of future revenue, as it represents the contracted revenue that has not yet been recognized. This metric is often used to judge a company's performance and potential for growth, making Workiva's recent results particularly encouraging for investors.
The raised price target to $104 from $96 by BMO Capital reflects a positive outlook for Workiva's stock, based on the company's ability to deliver consistent subscription revenue growth. The firm's analysis indicates a belief in the company's ongoing momentum and the potential for increased stock valuation in the near future.
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