Workday rises as Guggenheim upgrades citing recent share price downturn
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Workday (NASDAQ:WDAY) shares rose more than 3% in premarket trading on Monday as investment firm Guggenheim upgraded the cloud software company, noting that the recent downturn in the stock price seems overdone.
Analyst John DiFucci raised his rating on Workday (WDAY) shares to neutral from sell, noting that shares have fallen 23% since August 10, compared to the 23% decline in the iShares Expanded Tech-Software Sector ETF (IGV) and 10% decline in the S&P 500.
"If macro conditions worsen, there will likely be heightened near-term risk, which would impact long-term targets," DiFucci wrote in a note to clients. 
"That said, we view WDAY shares at fairly valued at 5.7x EV/NTM Subscription, or ~1 turn higher than our estimated intrinsic value of WDAY's existing recurring revenue if it was run hyper-efficiently, yet never grew (or declined) again," he added.
The analyst conceded, however, that it will be "challenging" for Workday (WDAY) to hit its long-term targets of 20% or more subscription revenue growth on its way to achieving $10B in organic revenue by fiscal 2026.
Hedge fund Coatue Management started a new position in Workday (WDAY) during the second quarter, along with making several other changes to its portfolio.
Analysts are universally positive on Workday (WDAY). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates WDAY a BUY.