Morgan Stanley Sees Workday As A Long-Term Winner

In a report published Thursday, Morgan Stanley analyst Jennifer Swanson Lowe reiterated an Equal-Weight rating on

. In the report, Morgan Stanley noted, “WDAY posted another strong printas billings, revenue, cash flow,and guidance all topped expectations.Total billings grew 56% YoY to $206M vs. us at $180M and cons.at $185M,and despitethe pull-forward of $15-20M of billings into Q1.Ex. the pull forward, Q2 billings growth would have been ~69%,vs. ~78% normalized billings growth in Q1.FY billings guidance moved ~6% higher at the midpoint to $940-960M vs. prior guidance of $890-910M. Revenues outperformed as well at $187M vs. us/cons at $177M, with ~$4M of the beat coming from subscription revenue. Better revenue flowed through to profitability, with operating income at ($19M) also came in ahead of us at ($26M).Stronger billings also benefitted cash flow, with cash from operations at ($9M),above us/cons.at $(26M)/$(12M). A solid result overall, but one we also see as priced in given the stock currently trading at 15x CY15 revs., well above the group average.” Workday closed on Wednesday at $90.30.