In a report released today, Scott Berg from Needham maintained a Buy rating on Workday, with a price target of $300.00.
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Scott Berg has given his Buy rating due to a combination of factors, despite Workday’s modestly disappointing second-quarter results. The company’s financial performance slightly exceeded consensus estimates, with a 16.3% growth in current remaining performance obligations (cRPO), which was above guidance, although this was largely due to early renewals. The Mid-Enterprise and European segments outperformed expectations, indicating a sluggish performance in the US Enterprise segment.
Workday’s continued investment in artificial intelligence, highlighted by the $1 billion acquisition of Paradox AI, also influenced Berg’s positive outlook. Paradox AI offers a unique natural language-based recruiting solution for frontline workers, and while the acquisition comes at a high revenue multiple, Berg views this strategic move favorably. Despite the flat revenue guidance for FY26 post-acquisition, these strategic investments and the potential for growth in AI solutions underpin the Buy rating.
In another report released today, Barclays also maintained a Buy rating on the stock with a $285.00 price target.