- Contrary to positive commentary regarding the arrangement out of Drexel Hamilton and elsewhere, Brean Capital's Yun Kim suggests that although the contract potentially indicates a rebound in Workday's core HCM business, variability and uncertainty are considered to remain, with disruption and less focus on securing new accounts also observed concerns should the deal be improperly managed.
- Further: "Fundamentally, our checks continue to indicate a lackluster demand environment for WDAY Financials in the large enterprise market. In our view, the stock’s current high valuation (CY17 EV/S of 7.8x) reflects gaining sizable market share in the $27B financials app market, which requires strong traction in the enterprise market. Until that traction emerges, we believe risk/reward is not favorable at current valuation levels."
- Maintains Workday (WDAY -3.1%) at Sell with a $62 target (current price $79.14).
- Yesterday (January 11, 2017): Workday trading halted for pending news release / Workday +7.2%; William Blair indicates contract with company employing 2M+