Workday Has A 'Long Runway Of Growth,' Says Bullish Analyst

Workday Inc WDAY has invested millions of dollars to increase its AI capabilities.

The company has evolved into a multi-product platform that creates massive expansion opportunities, according to RBC Capital Markets.

The Workday Analyst: Rishi Jaluria initiated coverage of Workday with an Outperform rating and a price target of $275.

The Workday Thesis: The company has a long runway of more than 20% subscription growth, Jaluria said in the initiation note.

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The company’s solutions are expanding from core HR into financials, “with future potential in planning and spend management,” the analyst stated.

Workday’s subscription growth is likely to be driven by “the continued displacements of legacy solutions, a large expansion opportunity following a successful evolution into a multi-product platform, and an underappreciated M&A engine, coupled with a clear path to 30%+ margins long term,” Jaluria wrote.

“We appreciate Workday’s approach to balancing the long runway of growth with healthy profitability,” he added.

WDAY Price Action: Shares of Workday were up 1.2% to $227.06 at the time of publishing Wednesday.

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