2023-09-28 12:08:44 ET
Workday Inc (NASDAQ: WDAY) says annual growth in its subscription revenue will likely be a bit shy of its previous forecast. Its shares lost 10% on the announcement this morning.
Workday is accounting for macro uncertainty
The human resources technology company cited “uncertain economic environment” today as it guided for a 17% to 19% increase in its annual subscription revenue over the next three years.
Its previous outlook was for that growth to be in excess of 20%.
According to Carl Eschenbach – the Co-Chief Executive of Workday Inc – macroeconomic challenges and more broadly the debate around a possible recession will likely continue in the coming months and, so, it made sense to factor that narrative into the guidance.
Workday stock is still up more than 20% versus the start of this year.
Jim Cramer shares his view on Workday stock
Workday Inc has opted to trim its long-term outlook even though it came in comfortably ahead of Street estimates in its latest reported quarter .
On CNBC’s “ Squawk on the Street ”, famed investor Jim Cramer agreed that the update today was concerning. Still, he fixated on the company’s solid track record and said:
Workday is a really fabulous company … this company has been straight-shooting so maybe we can feel whether the stock’s [move] is an overreaction.
Needham analyst Scott Berg also said on Thursday that the updated outlook may just be an attempt to lower the bar amidst the economic uncertainty. His $250 price target on Workday stock suggests about a 20% upside from here.
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