Can Workday's Share Price Keep Up With Company's Growth?
"Beating the numbers has been routine," BMO Capital Markets analyst Joel P. Fishbein Jr. said in a note Wednesday. "Valuation remains our primary concern."
Fishbein maintained an $83 price target and Market Perform rating on the business software concern.
Trading at a premium over its competitors is justified given current growth, according to Deutsche Bank analyst Karl Keirstead. But the stock's valuation "isn't compelling," Keirstead said in a note that maintained a Hold rating and a $100 price target.
Likewise, Bluefin analyst Shebly Seyrafi figures present market valuation is "fair." Seyrafi maintained a Sector Perform rating and cut the firm's price target to $100 to reflect expected higher expenses.
But there's no debate that growth is key to the business software concern's story.
Revenue growth could stay at a 40 percent-plus rate for "longer than most investors contemplate," Canaccord Genuity analyst Richard Davis said in a note. Davis maintained a Buy on the stock, but cut his price target to $110 from $115 a share.
Sustained, revenue growth is "a pretty good way to prevent your multiples from contracting as fast as skeptics anticipate," said Davis.
Shares of Workday closed Wednesday at $84.04, up 2.33 percent.
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