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Workday's Guidance May Be Conservative

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Workday's Guidance May Be Conservative
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Workday Inc (NYSE: WDAY) reported strong quarterly results, with billings ahead of expectations. Given these results, the company’s guidance appears “conservative on most metrics,” BMO Capital Markets’ Keith Bachman said in a report. He maintained a Market Perform rating on Workday, while raising the price target from $90 to $93.

Workday reported its quarterly billings at $431 million, beating the consensus estimate of $420 million. Management raised the higher-end of its billings guidance range for FY17 by merely $5 million, which is less than the billings beat of $11 million in the quarter, analyst Bachman noted.

Key Takeaways

“Commentary around financial products sounds promising, consistent with our views,” Bachman wrote. He commented that although Workday had reported a beat on operating profit, this was less significant than the revenue and billings growth recorded by the company for the quarter.

Related Link: BTIG Says Workday "Working It," Raises Price Target

The analyst raised the revenue and EPS estimates for FY18 from $2,058 million to $2,068 million and from $0.40 to $0.45, respectively. The FCF per share estimate for FY18 has been revised upwards from $1.01 to $1.13.

The rating has been maintained because the stock does not appear “compelling at current valuations,” Bachman added.

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Latest Ratings for WDAY

DateFirmActionFromTo
Jan 2017Wells FargoInitiates Coverage OnMarket Perform
Dec 2016Northland SecuritiesReinstatesOutperformMarket Perform
Dec 2016DA DavidsonMaintainsBuy

View More Analyst Ratings for WDAY
View the Latest Analyst Ratings

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