Conservative macro view ‘stings’ Workday story, says BMO Capital

BMO Capital keeps an Outperform rating and $260 price target on Workday after the company’s Analyst Day presentation. The management’s down-tick in the medium-term growth ambition is reflecting conservatism on the macro following a year of extended sales cycles and suggests that investors should anticipate roughly similar growth to FY24’s 18% growth guidance over the next few years, the analyst tells investors in a research note. The firm adds however that with the investment cycle starting to turn, margins heading into FY25 should improve.