Analysts Raise Price Targets On Workday Amidst Post-Earnings Sell-Off

Analysts lifted their price targets on Workday Inc WDAY post Q3 earnings. Oppenheimer analyst Ray McDonough recommends using today's post-earnings selloff in Workday shares as a buying opportunity. Workday reported a "mixed" Q3, beating on both the top and bottom line but missing billings expectations. 

The analyst does not expect any disruption from the management changes but sees the VNDLY acquisition and "prudent" guidance weighing on the stock near-term. However, he expects the guidance to prove conservative and reiterates an Outperform with a $340 PT, implying a 13.7% upside.

• Piper Sandler analyst Brent Bracelin raised the PT to $360 from $295, implying a 20.4% upside, and kept an Overweight.
• The analyst says the second straight quarter of accelerating subscription growth that topped 21%, coupled with a 2022 preliminary outlook calling for a return to 20% subscription growth, strengthens his confidence in Workday's secular drivers. 
• He would look to add to positions on the post-earnings share pullback.
• Barclays analyst Raimo Lenschow raised the PT to $345 from $340, implying a 15.3% upside, and kept an Overweight post the "solid" quarter. 
• However, the analyst believes Workday shares "will take a breather in the short term following the recent strong performance."
• KeyBanc analyst Michael Turits raised PT to $345 from $315 and kept an Overweight. 
• The company's Q3 beat included continued subscription revenue and CRPO acceleration and Q3 subscribers, and the Q4 guide beat by 1% vs. 2% last quarter.
• Baird analyst Mark Marcon raised the PT to $285 from $275 and kept an Outperform rating on the shares. 
• The analyst noted that the 24-month sub backlog growth was slightly below some expectations. 
• He said his perspective is that the long-term outlook remains very strong with HCM gaining share internationally and FINS+ poised to accelerate further as offices of the CFO accelerate the shift to the cloud in 2022 and 2023.
• Price Action: WDAY shares traded lower by 7.6% at $276.27 in the premarket session on the last check Friday.