On Friday, KeyBanc Capital Markets maintained its Overweight rating on Workday (NASDAQ:WDAY) stock, keeping the price target steady at $330.00.
The firm's analysis centers on the anticipation of Workday's first quarter fiscal year 2025 earnings report, which is scheduled for May 23, 2023. The focus for investors, according to the firm, is expected to be on macroeconomic factors and international performance as they approach the earnings release.
The broader enterprise software and human capital management (HCM) sectors have shown mixed results during the first quarter earnings season, with macroeconomic challenges tempering growth prospects.
As a result, KeyBanc anticipates that Workday's calculated remaining performance obligations (cRPO) will likely align with current expectations without significant surprises.
Despite these macroeconomic headwinds, Workday has experienced positive developments internationally over the past two quarters. The company's adjustments in pricing and packaging have the potential to contribute to another period of growth acceleration.
KeyBanc suggests that this international momentum could help to balance any macro-related weaknesses or even provide additional growth opportunities for Workday.
The firm's stance ahead of the earnings report is cautiously optimistic, acknowledging the potential for international business to bolster Workday's performance. The Overweight rating indicates KeyBanc's belief that the stock could outperform the average total return of stocks in the analyst's coverage universe over the next 12 to 18 months.
InvestingPro Insights
As Workday (NASDAQ:WDAY) approaches its Q1 2025 earnings report, insights from InvestingPro provide a clearer picture of the company's financial standing. With a robust market capitalization of $68.07 billion and a high gross profit margin of 75.6% over the last twelve months as of Q4 2024, Workday exhibits a strong position in the enterprise software and human capital management sectors. The company's revenue growth remained solid, with a 16.78% increase in the last twelve months, reflecting its potential to navigate economic headwinds effectively.
InvestingPro Tips highlight Workday's financial prudence, as the company holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. This could provide a buffer against macroeconomic volatility. Additionally, 26 analysts have revised their earnings upwards for the upcoming period, signaling a positive outlook on the company's performance.
For those considering an investment in Workday, InvestingPro offers additional insights, with 15 more tips available on the platform. Interested investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing a deeper dive into Workday's financials and market position. With the next earnings date set for May 23, 2024, these InvestingPro resources can help investors make more informed decisions.
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