Workday's (WDAY) "Buy" Rating Reaffirmed at Needham & Company LLC

Key Points

• Needham reaffirmed its “Buy” rating on Workday and set a $230 price target, implying 23.56% upside from the prior close. Analysts overall remain mixed, with a consensus “Hold” rating and an average target of $206.34.
• Workday exceeded quarterly expectations, reporting $2.75 in adjusted EPS versus $2.61 expected and $2.65 billion in revenue. Revenue increased 12.8% year over year.
• Institutional investors own 89.81% of Workday, while insiders have sold 792,720 shares worth approximately $146.4 million over the past three months.

Workday (NASDAQ:WDAY - Get Free Report)'s stock had its "buy" rating restated by research analysts at Needham & Company LLC in a research report issued on Monday, MarketBeat.com reports. They currently have a $230.00 price target on the software maker's stock. Needham & Company LLC's price objective points to a potential upside of 23.56% from the company's previous close.

A number of other equities research analysts have also recently commented on WDAY. Guggenheim restated a "buy" rating and set a $275.00 target price on shares of Workday in a research report on Friday, August 21st. TD Cowen dropped their target price on Workday from $220.00 to $210.00 and set a "hold" rating on the stock in a research report on Friday, August 28th. Stifel Nicolaus raised their target price on Workday from $115.00 to $160.00 and gave the company a "hold" rating in a research report on Friday, August 28th. DA Davidson raised their target price on Workday from $135.00 to $190.00 and gave the company a "neutral" rating in a research report on Friday, August 28th. Finally, Morgan Stanley raised their target price on Workday from $145.00 to $180.00 and gave the company an "underweight" rating in a research report on Friday, August 28th. Twenty investment analysts have rated the stock with a Buy rating, eighteen have issued a Hold rating and two have issued a Sell rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Hold" and a consensus price target of $206.34.

Workday Price Performance

NASDAQ:WDAY opened at $186.14 on Monday. Workday has a 52 week low of $110.36 and a 52 week high of $247.40. The company has a quick ratio of 0.91, a current ratio of 0.91 and a debt-to-equity ratio of 0.31. The stock has a market capitalization of $44.86 billion, a PE ratio of 37.76, a price-to-earnings-growth ratio of 1.87 and a beta of 1.07. The stock's 50-day moving average price is $187.10 and its 200-day moving average price is $149.80.

Workday (NASDAQ:WDAY - Get Free Report) last posted its earnings results on Thursday, August 27th. The software maker reported $2.75 EPS for the quarter, beating analysts' consensus estimates of $2.61 by $0.14. Workday had a return on equity of 20.95% and a net margin of 12.32%.The firm had revenue of $2.65 billion for the quarter, compared to analysts' expectations of $2.64 billion. During the same period last year, the firm earned $2.21 EPS. The company's quarterly revenue was up 12.8% on a year-over-year basis. As a group, equities analysts expect that Workday will post 5.33 EPS for the current fiscal year.

Insider Activity at Workday

In related news, major shareholder David Duffield sold 107,500 shares of the firm's stock in a transaction dated Thursday, July 9th. The shares were sold at an average price of $136.74, for a total value of $14,699,550.00. Following the transaction, the insider directly owned 105,049 shares of the company's stock, valued at approximately $14,364,400.26. This trade represents a 50.58% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Gerrit Kazmaier sold 2,728 shares of the firm's stock in a transaction dated Tuesday, July 7th. The shares were sold at an average price of $143.62, for a total transaction of $391,795.36. Following the completion of the transaction, the insider directly owned 266,388 shares in the company, valued at $38,258,644.56. This represents a 1.01% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders have sold 792,720 shares of company stock valued at $146,354,593. 18.64% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently bought and sold shares of WDAY. CX Institutional lifted its stake in Workday by 5.8% in the 3rd quarter. CX Institutional now owns 3,559 shares of the software maker's stock worth $678,000 after purchasing an additional 195 shares in the last quarter. Versant Capital Management Inc lifted its stake in Workday by 34.2% in the 3rd quarter. Versant Capital Management Inc now owns 3,188 shares of the software maker's stock worth $607,000 after purchasing an additional 813 shares in the last quarter. QRG Capital Management Inc. lifted its stake in Workday by 4.8% in the 2nd quarter. QRG Capital Management Inc. now owns 10,403 shares of the software maker's stock worth $1,274,000 after purchasing an additional 477 shares in the last quarter. Junto Capital Management LP purchased a new position in Workday in the 2nd quarter worth approximately $45,000,000. Finally, Tidal Investments LLC lifted its stake in Workday by 43.6% in the 2nd quarter. Tidal Investments LLC now owns 1,439,456 shares of the software maker's stock worth $176,218,000 after purchasing an additional 437,175 shares in the last quarter. 89.81% of the stock is owned by hedge funds and other institutional investors.

About Workday

Workday, Inc develops cloud-based enterprise software for managing an organization's people, finances and operations. Its platform is primarily used by businesses, government agencies and educational institutions to support human resources, finance, planning, analytics and related administrative processes.

The company's offerings include Workday Human Capital Management, Financial Management, Adaptive Planning, Spend Management, payroll, recruiting, talent management, learning and workforce analytics.