On Friday, Raymond (NS:RYMD) James analyst Brian Peterson raised the rating of Workiva (NYSE:NYSE:WK) from Market Perform to Outperform, setting a price target of $135.00. Peterson cited the company's strong third-quarter performance in 2024 and the potential for sustained growth in subscription revenue over the next year as key reasons for the upgrade.
The analyst noted that Workiva's accelerating bookings dynamics, which were evident in the third quarter of 2024, are expected to continue and contribute to an increase in subscription revenue. This expectation, along with positive preliminary feedback on the company's efforts to revamp its go-to-market strategy, underpins the analyst's confidence in Workiva's ability to reach its 2027 revenue goal of $1.1-1.2 billion—a target not yet reflected in the current stock price.
Peterson highlighted Workiva as a standout SaaS company with accelerating growth, pointing out that it has managed to achieve over 20% subscription growth while still trading at a discount compared to its peers. The analyst anticipates that both the company's financial estimates and its market multiple could see an increase in 2025.
Despite acknowledging that Workiva is unlikely to officially project a 20%+ subscription revenue growth for 2025, Peterson believes that the company is well-positioned to attain this level of growth again, especially given its track record of hitting similar targets in the past despite economic challenges.
The analyst also identified several potential catalysts that could drive Workiva's stock performance, including ongoing regulatory changes, such as the Corporate Sustainability Reporting Directive (CSRD) deadlines and California state regulations, technological factors like the ERP refresh cycle, and an improvement in capital markets activity.
These factors, according to Peterson, could further bolster investor confidence and contribute to Workiva's stock appreciation.
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