Oppenheimer analyst Brian Schwartz reiterated an Outperform rating on the shares of Workday, Inc. (NASDAQ:WDAY) with a price target of $240.
The analyst believes Workday is well-positioned to continue to benefit from strength in its core markets, from good replacement and catch-up spending trends for back-office solutions.
As IT budgets continue to open up, Schwartz expects the company to reaccelerate subscription revenue growth, given durable growth in HCM and a rebound in its financials suite.
The analyst notes that Workday will see durable top-line and margin growth in the coming days with increasing sales capacity investments and co-selling enablement initiatives with its most significant partners.
Workday’s sales typically reflect a 60/40 mix between new logos and expansions, and recently the company has been experiencing more early renewals.
The analyst thinks Workday has good AI functionality and capabilities for its customers and continues to innovate rapidly with AI throughout the platform technologies.
The analyst adds that the company is also expected to grow from new F500 customer wins for Workday Financials and cloud product introductions that expand the total addressable market.
Also Read: Workday Gets Price Target Hikes By Analysts Following Upbeat Q1 Results, Shares Surge
Price Action: WDAY shares are trading higher by 1.23% to $216.69 on the last check Wednesday.