RBC Remains Bullish On Workday After Meeting With Management

Loading...
Loading...

Discussions with top management at Workday Inc WDAY indicate a large market opportunity, an increase in adoption of core financials and the expansion of the financial planning segment, according to RBC Capital Markets.

The Analyst

RBC Capital Markets’ Ross MacMillan maintains an Outperform rating on Workday with an unchanged $220 price target.

The Thesis

The on-demand financial and human capital management software vendor has a customer base of 2,600 companies, MacMillan said in a Tuesday note. 

The company indicated there are an estimated 35,000-38,000 companies globally that would consider Workday’s products as viable solutions, the analyst said. 

Although 40 percent of Fortune 500 companies are using Workday for HCM, most of the remaining 60 percent are yet to move to cloud HCM, MacMillan said. 

The company added 79 core financials customers in the fourth quarter, four of which are Fortune 500 companies, he said. 

The improved adoption of core financials is being driven by several factors, including customers becoming increasingly comfortable putting core financials in the cloud; the product’s maturity; enhanced vertical capabilities; and a larger reference customer base, according to RBC. 

Workday believes the financial planning market is almost as large as the core financial management market, MacMillan said.

“As companies push more performance responsibility down to line managers, a planning tool integrated with the core financials transaction engine will drive agility in organizations and elevate the value of an integrated platform.”

Price Action

Loading...
Loading...

Workday shares were trading down slightly at $187.22 at the time of publication Wednesday. 

Related Links:

Wells Fargo Raises Workday Price Target On Expectations Of Continued Market Share Gains

10 Biggest Price Target Changes For Friday

Photo courtesy of Workday. 

Loading...
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorPrice TargetReiterationAnalyst RatingsRBC Capital MarketsRoss MacMillan
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...