JMP Still Likes WorkDay Before Earnings, Maintains Outperform And $116 Target

In a report published Monday, JMP Securities analysts maintained a Market Outperform rating on Workday Inc. WDAY, with a price target of $116. Workday is scheduled to report its 1Q16 earnings on May 26. The company is expected to report revenues of $245.1 million, up 53 percent year on year and a non-GAAP operating margin of (4.8) percent and non-GAAP EPS of ($0.07). "We look for billings of $260M, up 25% y/y, versus management's guidance of $225-260M and against a very difficult comparison of 94% y/y billings growth in F1Q15," the analysts mentioned. Referring to reports of Workday having bagged a global HCM deal with a Fortune 100 company, the analysts mentioned, "We reviewed 260 of Workday's publicly disclosed customers and estimate that, on average, Workday generates about $89/year/employee at each of its customers, suggesting that this deal could be worth roughly $26.7M, although we would expect such a large deal to receive a significant discount." The company seems to be attracting a number of clients in the enterprise space and the morale of its sales people appears to be good.