Workday rises even as Societe Generale downgrades on lower fiscal 2024 forecast
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Workday (NASDAQ:WDAY) shares rose fractionally in mid-day trading on Wednesday even as investment firm SociÃ©tÃ© GÃ©nÃ©rale downgraded the cloud computing software company following its fourth-quarter earnings report. 
Analyst Richard Nguyen lowered the firm's rating on Workday (WDAY) to hold from buy and tweaked the per-share price target to $205 from $212, noting that while the company's fundamentals are still strong, fiscal 2024 could be slightly more difficult than first estimated. 
"While we continue to like Workdayâs fundamentals (strong backlog underpinning future revenue growth prospects and margin improvement), following its [fourth-quarter fiscal 2023] results publication on 27 February (details on p.2) we are shading down our [fiscal 2024] revenue forecasts," Nguyen wrote, citing concerns over the global economy.
Nguyen noted Workday's (WDAY) management expects revenue growth to return to more than 20% once the economy gets back on track. It provided subscription revenue guidance of $6.525B to $6.575B, up between 17% and 18% year-over-year, tightened from a prior view of $6.5B to $6.6B.
The analyst also noted that Workday (WDAY) is expecting a 350 basis point improvement in its adjusted operating margins to be around 23%, up from a prior view of 150 to 200 basis points, due to a change in how it views the useful life of its servers and networking equipment.
"This implies that after adjustment for this factor, the group anticipates achieving the high end (200bp) of its prior margin guidance range despite the tightening of its high-end revenue outlook," Nguyen added. 
On Monday, Workday (WDAY) made several executive appointments, including adding Mark Hawkins as an independent director of its board.