SAP - Workday: Stock Has Likely Bottomed Presenting A Buying Opportunity
2024-06-24 01:33:28 ET
Summary
- Workday reported Q1 revenue and earnings beating expectations, with a focus on expanding TAM in the public sector and international markets.
- The company continues to build its partner ecosystem by adding Google Cloud Partners in Q1, as it accelerates its pipeline and drives higher ACV per customer.
- Meanwhile, it rolled out the general availability of its AI Marketplace, giving customers access to AI solutions from Workday and its partners, thus deepening adoption and monetization opportunities.
- Although the company faces increasing deal scrutiny as businesses are cautious, I believe that given its growth drivers and strong fundamentals, it is attractively priced to drive upside.
Introduction & Investment Thesis
Workday ( WDAY ) is a cloud-based software company that provides solutions for financial management, spend management, human capital, planning, and analytics. I initiated a “hold” rating on the stock on March 31st, and since then, the stock has declined close to 20%, underperforming the indices. Although I was optimistic about the company’s growth levers of international expansion and its partner ecosystem along with its strong financial discipline, I rated the stock a “hold” because I believed that its future growth estimates were priced into its valuation, with little upside left for long-term investors....
Workday: Stock Has Likely Bottomed, Presenting A Buying Opportunity