Workday could see Q2 growth slow as 'tough times' tames portfolio: Monness, Crespi, Hardt
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Workday (NASDAQ:WDAY) is slated to report second-quarter results on August 25 and though the company has a "strong portfolio," according to investment firm Monness, Crespi, Hardt, it is likely to see growth slowdown as a result of the broader economic slowdown.
Analyst Brian White, who has a buy rating and a $200 price target on Workday (WDAY), noted that growth is likely to decelerate for the back-office software company, as sales are expected to rise 20% year-over-year to $1.515B, but only up 6% sequentially, below the four-year average of 7%.
Included in that $1.515B is an estimate of $1.351B in subscription sales and $164.2M in professional services revenue.
A consensus of analysts estimate Workday (WDAY) will earn an adjusted 80 cents per share on $1.52B in revenue for the period.
White noted that given the longer-term shift to the cloud and continued digital transformation, Workday (WDAY) has "further room to run" in the human capital management market and the financial management resources market, but the current environment is likely to impact the company. 
"In our view Workday has never been positioned better; however, we expect the current environment will prove disruptive," White wrote in a note to clients.
"Although the enterprise software world has yet to experience a material fundamental impact from this economic slowdown, we would be surprised if this environment doesnât eventually catch up with the group and weigh on Workdayâs growth over the next 12-18 months."
Looking ahead, White estimates that Workday (WDAY) will generate $1.579B in third-quarter revenue and $6.172B revenue for the full-year.
Hedge fund Coatue Management started a new position in Workday (WDAY) during the second-quarter, along with making several other changes to its portfolio.