Workday Analysts Expects Q1 Revenue, Earnings Upside

Workday Inc WDAY is gearing up to report its fiscal first-quarter results on Thursday, May 22.

The company is likely to report a revenue and earnings beat, while "some late quarter deal slippage" may result in lower cRPO (current remaining performance obligation) upside than posted in the previous quarter, according to Needham.

The Workday Analyst: Analyst Scott Berg reaffirmed a Buy rating and price target of $300.

The Workday Thesis: Industry checks suggest the company witnessed "relatively stable demand" in the first quarter, although its sales cycles expanded for some larger deals and were pushed into the second quarter, Berg said in the note.

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Workday may beat expectations, "with core HCM among enterprise businesses showing relative strength," he added.

The company is likely to reiterate its full-year cRPO guidance, although its overall pipeline activity "appears favorable," the analyst stated.

"We think current operating margin guidance is conservative given the company’s February RIF even as we expect incremental investment in AI functionality," he further wrote.

WDAY Price Action: Shares of Workday had declined by 0.11% to $273.55 at the time of publication on Wednesday.

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