Can Workday's Share Price Keep Up With Company's Growth?

Workday Inc. WDAY once again beat quarterly expectations to analysts' loud applause. But some wonder whether the stock price is too rich.

"Beating the numbers has been routine," BMO Capital Markets analyst Joel P. Fishbein Jr. said in a note Wednesday. "Valuation remains our primary concern."

Fishbein maintained an $83 price target and market-perform rating on the business software concern, which changed hands at $82.96, up 1.01 percent in mid-afternoon.

Trading at a premium over its competitors is justified given current growth, according to Deutsche Bank analyst Karl Keirstead. But the stock's valuation "isn't compelling," Keirstead said in a note that maintained a hold rating and a $100 price target.

Likewise, Bluefin analyst Shelby Seyrafi figures present market valuation is "fair." Seyrafi maintained a sector perform rating and cut the firm's price target to $100 to reflect expected higher expenses.

But there's no debate that growth is key to the business software concern's story.

Revenue growth could stay at a 40 percent-plus rate for "longer than most investors contemplate," Canaccord Genulty analyst Richard Davis said in a note. Davis maintained a buy on the stock, but cut his price target to $110, from $115 a share.

Sustained, revenue growth is "a pretty good way to prevent your multiples from contracting as fast as skeptics anticipate," Davis said.