Workday Hosted Its Annual Conference And Analyst Event: Here's What Wall Street Is Saying

Shares of Workday lost more than 5 percent during Wednesday's morning trading session after the company hosted a company event and analyst session on Tuesday.

Here is how some of Wall Street's top analysts reacted to the event.

Canaccord: ‘OK' To Buy The Stock

David Hynes, Jr. of Canaccord Genuity commented in a note that Workday's presentation "reinforced" his positive fundamental view of the business. Specifically, its platform architecture and innovation continue to "widen the competitive gap," while customer satisfaction remains at "industry-leading levels."

Hynes continued that Workday is "quite likely" to emerge as the winner within cloud HR and Financials – a position that should generate $10 billion revenue (at a mid-20 percent margin) over the next eight years or so.

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Shares remain Buy rated with a price target lowered to $90 from a previous $100.

Wedbush: Management's Tone ‘More Positive'

Steve Koenig of Wedbush commented in a note that the "biggest news" at the event was the announcement of Workday Learning, marking the company's entrance into LMS, which expands its total addressable market to $60 billion.

Koenig also stated that IBM's announcement of the acquisition of a 200-person workday integrator is "encouraging" and "speaks volumes" about the company's market position and emerging status as a full-suite enterprise applications vendor.

Workday also focused on the "subject investors care about the most," namely progress with financial applications. The company "reminded" analysts that it has already signed a Fortune 500 customer (Unum) and expects to announce further contracts over the next one to two quarters. In addition, management said that its financials pipeline "has doubled" over the last two quarters.

Finally, Koenig stated that management's tone "sounded confident" and was "more positive" than it was during its analyst meeting in April.

Shares remain Outperform rated with an unchanged $99 price target.

Brean Capital: Still Waiting For ‘Broader Adoption'

Sarah Hindlian of Brean Capital commented in a note that the company's event didn't contain any "key product announcements," which are "largely a year or more away" from deployment. The analyst added that other products, such as Learning, will likely require "several years" to fully ramp.

Hindlian also suggested that several of Workday's updates were "interesting," there were no "marquee" and "complex" financials customers announced, which is "critical" for the stock to appreciate higher.

Shares remain Hold rated with no assigned price target.

Wunderlich: Execution ‘Still Needs To Improve'

Rob Breza of Wunderlich commented in a note that Workday's management team focused on how it plans to increase adoption of existing products like financials, improve deployment timeframes and enhance its current platform of offerings. The analyst added that absent during the presentation was any guidance or outlook on the company's long-term model.

Breza also noted that while he came away with a "positive view" of the company's initiatives, execution (especially in Financials) still needs to improve to justify the stock's "lofty" valuation given its P/S ratio of 8.4x his fiscal 2017 revenue estimate – marking a premium to the next-gen SaaS group of 5.0x.

Shares remain Hold rated with an unchanged $88 price target.