UPDATE: Piper Jaffray Initiates Coverage on Workday with Neutral Rating, $49 PT

In a report published Wednesday, Piper Jaffray & Co. initiated coverage on Workday

with a Neutral rating and $49.00 price target. Piper Jaffray noted, “We are initiating coverage of Workday (WDAY) with a Neutral rating and $49 price target. We are very bullish on WDAY‘s growth potential, and we back up this viewpoint with our proprietary survey of HRIS managers, which outlines a path for Workday to quintuple its market share in the course of the next 3 to 5 years. However, while we believe WDAY‘s multi-year growth trajectory will place it in a rare echelon, we caution investors that the current valuation on WDAY shares is even rarer. At 25.3x EV/FTM revenue versus 9.1x for its peer group of ultra-high-growth SaaS companies, WDAY is the most expensive software stock we can recall since the dot-com bubble of 1999/2000. We think consensus forecasts are conservative and acknowledge that WDAY might grow into this multiple in the coming years, but prefer to manage risk by waiting for a better entry point, perhaps driven by the IPO lockup expiration or broader market conditions.” Workday closed on Tuesday at $51.85.