Workday
 (WDAY)

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  • Yesterday, 10:48 AM
    • Declaring the company to be in the early stages of a "long-tailed enterprise HR implementation cycle," Mitsubishi UFJ's Stephen Bersey has launched coverage on Workday (WDAY +2.5%) with an Overweight rating and $60 target.
    • Bersey: "[H]uman resources (HR) has been an area of IT neglect within the enterprise application market, and that has created a large market opportunity for cloud-based vendors." He's also upbeat on the long-term potential of Workday's cloud financials offerings, while cautioning HR products will remain the main near-term growth driver. "[T]he value of the financials end-market could be greater than that of the HR market and that this opportunity is not fully reflected in the stock’s value.”
    • Workday is bouncing a little after having dropped 24% over the prior two trading days thanks to a tech rout in which cloud software firms were among the hardest-hit names. FQ4 results arrive on the afternoon of Feb. 29.
    • Three months ago: Wedbush downgrades Workday post-earnings on Oracle fears; others defend
    • Four months ago: Stephens upgrades Workday, expects more financials traction
    | Yesterday, 10:48 AM
  • Mon, Feb. 8, 2:37 PM
    • Many tech stocks are seeing 6%+ losses as investors flee to safety yet again. The Nasdaq is down 3.4%, and the S&P 2.7%.
    • As was the case on Friday following Tableau and LinkedIn's disappointing guidance, a slew of enterprise tech stocks are seeing big losses, with cloud software and security tech names well-represented on the casualty list.
    • Also: Solar stocks are having another brutal day (TAN -6.7%) as energy stocks get routed amid fears Chesapeake Energy is close to bankruptcy. WTI crude oil is once more near $30/barrel.
    • Enterprise software decliners: Adobe (ADBE -9.6%), Paylocity (PCTY -19.1%), Salesforce (CRM -9.9%), Workday (WDAY -12%), Guidewire (GWRE -12.5%), ServiceNow (NOW -11.5%), Zendesk (ZEN -13.8%), Paycom (PAYC -13.4%), Marin Software (MRIN -10.3%), Castlight (CSLT -8.4%), Cornerstone OnDemand (CSOD -12.1%), Atlassian (TEAM -13.2%), inContact (SAAS -9.6%), and Bazaarvoice (BV -14.5%).
    • Enterprise security decliners: Palo Alto Networks (PANW -12.2%), FireEye (FEYE -9.8%), CyberArk (CYBR -11.5%), Proofpoint (PFPT -12.7%), Qualys (QLYS -8.9%), Imperva (IMPV -9.7%), Rapid7 (RPD -9.4%), and Barracuda (CUDA -8.4%).
    • Solar decliners: SunEdison (SUNE -11.3%), SunPower (SPWR -8.8%), JinkoSolar (JKS -7.6%), SolarEdge (SEDG -7.9%), Yingli (YGE -7.1%), TerraForm Power (TERP -10.7%), and TerraForm Global (GLBL -9.2%).
    • Other major decliners: Micron (MU -9.1%), Western Digital (WDC -10.5%), Arista (ANET -10.9%), Universal Display (OLED -10.6%), Rackspace (RAX -11.3%), Fitbit (FIT -8.7%), Nimble Storage (NMBL -11.3%), Sierra Wireless (SWIR -9.9%), Rocket Fuel (FUEL -9.8%), Knowles (KN -9%), Mitel (MITL -8.9%), and Alarm.com (ALRM -8.9%).
    • Previously covered: Yelp, Cognizant, Tableau, Globant, Ambarella, European tech stocks
    | Mon, Feb. 8, 2:37 PM | 26 Comments
  • Fri, Feb. 5, 11:01 AM
    • A long list of enterprise software and security tech names are off sharply after business intelligence/analytics software upstart Tableau (down 45.3%) reported slower-than-expected license revenue growth and issued below-consensus Q1/2016 guidance.
    • Also possibly weighing: LinkedIn (down 39.6%), which derives a large % of its revenue from cloud-based recruiting and sales tools for enterprises, issued weak Q1/2016 guidance.
    • Given the magnitude of the drops, margin calls and forced selling by funds could be playing a big role. The Nasdaq is down 2.2%.
    • Tableau suggested its growth slowdown has to do with softening IT spend and a need to improve sales productivity, but analysts have raised questions about competition from the likes of Microsoft, Amazon, and Qlik. LinkedIn forecast a growth slowdown for its field sales hiring solutions business, while blaming European/Asian macro pressures. The company also noted its display ad business continues declining amid weak industry growth.
    • Major enterprise software decliners include Splunk (SPLK -23.7%), Workday (WDAY -15.1%), Adobe (ADBE -7%), Zendesk (ZEN -15.2%), ServiceNow (NOW -13.6%), NetSuite (N -12.4%), Salesforce (CRM -11.2%), Paycom (PAYC -10.6%), Ellie Mae (ELLI -11.5%), Cornerstone OnDemand (CSOD -7.8%), Veeva (VEEV -7.7%), Ultimate Software (ULTI -9%), Luxoft (LXFT -7.5%), Manhattan Associates (MANH -8.5%), Box (BOX -6.6%), Guidewire (GWRE -13.6%), Demandware (DWRE -9.3%), Hortonworks (HDP -9.7%), and Tableau rival Qlik (QLIK -16.6%). The casualty list includes many cloud software firms, as well as several analytics software plays. Previously covered: New Relic, Atlassian.
    • Major decliners among security tech firms: Palo Alto Networks (PANW -12%), FireEye (FEYE -8.9%), Rapid7 (RPD -8.6%), CyberArk (CYBR -8.3%), Proofpoint (PFPT -8%), Imperva (IMPV -8.3%), Fortinet (FTNT -6.9%), and Vasco (VDSI -5.1%). The selloff comes in spite of an FQ3 beat and in-line FQ4 guidance from Symantec, which has been losing share to various upstarts.
    | Fri, Feb. 5, 11:01 AM | 19 Comments
  • Thu, Jan. 28, 2:53 PM
    • Though the Nasdaq is up 0.8%, enterprise cloud software firms Salesforce (CRM -2.7%), Workday (WDAY -3.8%), Demandware (DWRE -4.5%), Veeva (VEEV -3.5%), Cornerstone OnDemand (CSOD -3.3%), Marketo (MKTO -4.4%), Actua (ACTA -2.4%), HubSpot (HUBS -6.2%), and Zendesk (ZEN -2.7%) are lower after cloud IT service management (ITSM) software leader ServiceNow (NOW -16.5%) posted a Q4 billings miss to go with revenue/EPS beats and issued light 2016 sales guidance.
    • On ServiceNow's earnings call (transcript), CFO Michael Scarpelli attributed the billings shortfall to a ~$5M forecasting error. Regardless, Mizuho and MKM have responded to the Q4 report by downgrading to Neutral. Mizuho: "We find two [billings] misses in one year concerning." The firm is also worried about a premium valuation, missed quotas by sales reps, and a "large customer's preference to cut payment terms in half."
    • MKM is less concerned about the billings miss, and calls Q4 results solid. But the firm is worried about macro pressures, and thinks ServiceNow's track record of major op. margin guidance beats is "unlikely to be sustained given decelerating billings and the current macroeconomic environment."
    | Thu, Jan. 28, 2:53 PM | 12 Comments
  • Wed, Jan. 6, 1:46 PM
    • Barclays' Raimo Lenschow has downgraded firewall/security software firm Check Point (CHKP -1.9%), cloud talent management software firm Cornerstone OnDemand (CSOD -2.7%), and data warehousing hardware/software provider Teradata (TDC -3.8%) to Underweight. Cloud HR/financials software vendor Workday (WDAY -3.6%) and e-commerce software/services provider Demandware (DWRE -2.9%) have been cut to Equal Weight.
    • Cloud HR software firm Paycom (PAYC -1%), on the other hand, has been upgraded to Overweight on a belief consensus estimates are too low. Meanwhile, BofA/Merrill has launched coverage on Demandware at Buy.
    • Regarding Check Point, Lenschow says he prefer security tech firms that are gaining share - his top three ideas are Palo Alto Networks, Imprivata, and Rapid7. He sees security IT spend rising 7% in both 2016 and 2017, a rate on par with 2015's.
    • Regarding Cornerstone, Lenschow is worried about slowing top-line growth, a lack of profits, and growing competition. Regarding Workday, he's concerned about competition from SAP/Oracle, a high valuation, and the relatively limited impact of its financials offerings on sales growth.
    • The downgraded names are underperforming amid a 1.1% Nasdaq drop.
    | Wed, Jan. 6, 1:46 PM | 1 Comment
  • Dec. 11, 2015, 3:21 PM
    • A long list of tech firms are off sharply as the Nasdaq and S&P respectively drop 2% and 2.2% ahead of an expected Fed rate hike.
    • The casualty list includes threat-prevention hardware/software provider FireEye (FEYE -6.2%), machine data analytics software vendor Splunk (SPLK -7.1%), driver-assistance system vendor Mobileye (MBLY -6.3%), supercomputer makers Cray (CRAY -7.6%) and Silicon Graphics (SGI -7%), audio codec chipmaker Cirrus Logic (CRUS -5.3%), and local services marketplace Angie's List (ANGI -6.3%).
    • Others include cloud HR/financials software provider Workday (WDAY -5.6%). enterprise social networking software firm Jive Software (JIVE -5.9%), cloud telematics software provider FleetMatics (FLTX -5.2%), mobile accessory maker Zagg (ZAGG -7.5%), network visibility/monitoring hardware provider Gigamon (GIMO -5.8%), smart grid networking hardware/software provider Silver Spring (SSNI -8.9%), and online travel deals provider Travelzoo (TZOO -6%).
    | Dec. 11, 2015, 3:21 PM | 2 Comments
  • Nov. 20, 2015, 9:17 AM
    | Nov. 20, 2015, 9:17 AM
  • Nov. 19, 2015, 5:35 PM
    | Nov. 19, 2015, 5:35 PM
  • Nov. 6, 2015, 12:22 PM
    • In addition to beating FQ1 estimates, Paylocity (NASDAQ:PCTY) is guiding for FQ2 revenue of $48M-$49M and EPS of -$0.04 to -$0.02, above a consensus of $45.4M and -$0.08. The company also now expects FY16 (ends June '16) revenue of $210M-$214M and EPS of $0.04-$0.07, above a consensus of $201.6M and -$0.05.
    • Cloud HR/HCM software leader Workday (WDAY +2.5%) is following Paylocity higher. Cornerstone OnDemand's strong 2016 outlook might also be helping. Two days ago, Paylocity rallied in response to Paycom's Q3 beat and strong Q4 guidance. Workday's FQ3 report is expected later this month.
    • Paylocity CEO Steve Beauchamp: "We continue to see strong demand for our unified payroll and HCM platform and are encouraged by the response to our ACA Enhanced product offering," Adjusted gross margin rose 450 bps Y/Y to 58.8%. GAAP operating expenses rose 37% Y/Y to $28.3M.
    • Paylocity's Q3 beat, PR
    | Nov. 6, 2015, 12:22 PM
  • Oct. 1, 2015, 12:30 PM
    • Citing optimism about "new products, better positioning around the value proposition for financials, a growing ecosystem, [and] a revived go-to-market approach," Stephens' Alex Zukin has upgraded Workday (NYSE:WDAY) to Overweight amid the company's Workday Rising customer conference, and in the wake of its analyst day. His target remains $85.
    • Zukin is now more optimistic about Workday's ability to land Fortune 500 clients for its Financials product (still accounts for a much smaller portion of revenue than Workday's HCM/HR product), and notes there are now over 4,800 trained Workday implementation consultants, up 35% Y/Y. IBM is set to acquire Workday consulting/implementation firm Meteorix.
    • Shares are rallying on a down day for equities.
    • Analyst day slides (.pdf), more analyst commentary
    • Previously: Workday unveils employee-learning software, takes aim at Cornerstone
    | Oct. 1, 2015, 12:30 PM
  • Aug. 27, 2015, 12:55 PM
    • Workday (NYSE:WDAY) plunged 10% last night after beating estimates, but guiding light on full-year revenues. Alongside another major rally in the broad markets, the stock has reversed course, and is currently higher by 3.1%.
    • Citigroup's Walter Pritchard upgrades to Buy from Neutral. His $93 price target is about 20% higher than the current level. Noting the stock had traded at an "unjustifiable premium" to high-growth peers, Pritchard says the valuation is now more reasonable.
    • Cantor Fitzgerald and Canaccord reiterate their Buy ratings and respective $125 and $100 price targets, while FBN and Nomura reiterate Sector Perform/Neutral ratings and cut their price targets to $80 from $95, and to $90 from $105, respectively.
    • Nomura's Fred Grieb: “Both billings and total revenues were above expectations, although we note that growth for both has slowed."
    • Previously: Workday sees 51% FQ2 billings growth; customer count tops 1K (updated) (Aug. 26)
    | Aug. 27, 2015, 12:55 PM
  • Aug. 26, 2015, 5:24 PM
    • After briefly rising, Workday (NYSE:WDAY) is now down 0.7% after hours after posting an FQ2 beat and guiding in-line. Shares rose 3.5% in regular trading as markets surged.
    • Though Workday didn't provide a non-GAAP EPS number in its FQ2 report, it did state non-GAAP net income was $3.8M. That implies EPS of $0.02, above a -$0.06 consensus.
    • The cloud HCM/financials leader says it topped 1K customers during FQ2; it ended FQ1 with 925+. Subscription revenue rose 56% Y/Y to $223.7M, and professional services revenue 37% to $58.9M. On the earnings call, Workday states billings rose 51% Y/Y (even with revenue growth), and that FQ2 win rates were above FQ1 levels. The unearned revenue balance rose 42% Y/Y to $683.1M.
    • Free cash flow was -$10.3M, but totals $77.6M for the trailing 12 months. GAAP costs/expenses rose 41% Y/Y to $350.4M - sales/marketing spend totaled $106.4M, and R&D $115.3M. Workday ended FQ2 with $1.9B in cash/investments, and $502M in convertible debt.
    • Workday Planning, a budgeting/forecasting app that pushes the company deeper into the traditional ERP software market (SAP's historical stronghold), will become generally available next year.
    • FQ2 results/FQ3 guidance, PR
    • Update (5:30PM ET): Workday has guided on its call for FY16 (ends Jan. '16) revenue of $1.15B-$1.158B, above a $1.14B consensus. Shares now -3.3% AH.
    | Aug. 26, 2015, 5:24 PM | 2 Comments
  • Aug. 25, 2015, 10:03 AM
    • D.A. Davidson has upgraded Workday (NYSE:WDAY) to Buy ahead of tomorrow afternoon's FQ2 report, while cutting its target by $6 to $91 (still 26% above current levels).
    • Shares have rallied back above $72 on a morning in which the Nasdaq is up 2.6%; they fell as low as $65.33 yesterday. Evercore upgraded last month.
    | Aug. 25, 2015, 10:03 AM
  • Jul. 14, 2015, 10:01 AM
    • Evercore has upgraded Workday (NYSE:WDAY) to Buy, while cutting its target by $2 to $95.
    • The cloud HCM/financials software vendor has risen to its highest levels since May. Shares are once more positive on the year, albeit still down 29% from a Feb. 2014 peak of $116.47.
    • Separately, Workday has announced a VC fund (called Workday Ventures) focused on "identifying, investing, and partnering with early to growth stage companies that place data science and machine learning at the core of their approach to enterprise technology." Initial investments include mobile job aggregator app Jobr, analytics engine software provider Metanautix, security software firm ThinAir, and Web translation service Unbabel.
    • Update: More details here. Evercore's Kirk Materne believes expectations are now "more realistic," and predicts the adoption curve for Workday's financials products will similar to that seen by its HCM offerings. 30%+ annual sales growth is considered possible for the next few years.
    | Jul. 14, 2015, 10:01 AM
  • May 29, 2015, 6:29 PM
    • After tumbling on Wednesday in the wake of its FQ1 beat and in-line guidance, Workday (NYSE:WDAY) has continued trending lower. Shares fell 1.5% in regular trading today, hitting their lowest levels since Feb. 2.
    • Though no downgrades have arrived, several sell-side firms have suggested tougher competition is hurting growth, with Oracle's (NYSE:ORCL) cloud HR/HCM software the biggest culprit. Jefferies' John DiFucci: "We believe Oracle (and to a lesser degree, SAP) has been behaving irrationally in the market for almost a year ... while it was likely aggressive prior to this, we believe it became even more aggressive doing almost anything to win deals from Workday."
    • DiFucci sees a method to Oracle's madness. "This irrational behavior may not be so irrational since a loss to Workday is not only a loss of an HCM opportunity, but also a loss of Oracle infrastructure given Workday’s proprietary infrastructure architecture." However, he admits Oracle/SAP's HCM offerings (though improving) "still trail Workday by a meaningful margin."
    • Likewise, Brean's Sarah Hindlian asserts HCM is "becoming incrementally more competitive, with material new pricing pressure from incumbents, while SaaS penetration of the market is maturing." She also thinks Workday's cloud financials software growth is slower than investors were expecting.
    • Cowen's Jesse Hulsing is more positive, even if FQ1 billings were lighter than he forecast. "We are ... encouraged by the trend toward larger, blue chip HCM custs (Coca Cola, etc.) and a more bullish tone regarding the financials pipeline. PT to $101 and view the low $80s as attractive entry point, as we expect growth to improve moving forward."
    • During Oracle's March FQ3 CC (transcript), Mark Hurd didn't pass up the chance to trash-talk Workday. "In the context of HCM, I think ... we have simply engineered now a better product than Workday ... we now win more than half the deals in the United States. Outside the United States, our win rate goes up actually exponentially because of the breadth of our distribution in those markets." Workday might beg to differ with those claims.
    | May 29, 2015, 6:29 PM
  • May 27, 2015, 9:18 AM
    | May 27, 2015, 9:18 AM
Company Description
Workday Inc is a provider of enterprise cloud-based applications for human capital management, payroll, financial management, time tracking, procurement and employee expense management.
Sector: Technology
Country: United States