Summit Research Sees Solid, If Somewhat Slow, Quarter For Workday

In a report published Thursday, Summit Research analyst Richard Williams reiterated a Hold rating and $92.00 price target on

. In the report, Summit Research noted, “Workday (WDAY, HOLD) results were better on the top line at $186m versus our $168m estimate and consensus at $177m. Subscriptions were $14m ahead of our HCM number, but below our Financials estimate. We think modestly slower growth and a lack of catalysts could lead to a period of lackluster performance over the next few months. For example, billings fell to 10.8% versus 17.5% in F1Q, while deferreds slowed to 10% versus 11.5% in F1Q that capped 4 quarters of acceleration. For us, the next significant events will likely be F3Q results and the annual Rising conference in November, where new product announcements are typically made and key metrics updated. We think HCM revenue was $123m in F2Q. Financials revenue was not given, nor was customer count but we estimate $16.7m in F2Q versus our projected $18m. Management's decision to stop giving customer counts significantly diminishes our visibility into segment performance and therefore reduces our confidence.” Workday closed on Wednesday at $90.30.