Workday adds to gains as Societe General upgrades on 'impressive' Q4 results
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Workday (NASDAQ:WDAY) added to its early morning gains as investment firm Societe Generale upgraded the stock after the company released "impressive" fourth-quarter results.
Analyst Richard Nguyen upgraded the stock to buy from hold and raised the price target to $309 from $306, noting that the human resource software company has captured "solid momentum" going into fiscal 2023.
Nguyen added that management was "relatively upbeat" on the earnings call about the company's prospects for 2023 and even though the company is investing in future growth, with operating margin guidance of 18.5% compared to 22.4% operating margins in 2022, operating margins should hit 25% when revenue hits $10 billion in a few years.
"We think the recent pullback in the share price represents a good buying opportunity, as the company has strong fundamentals and an excellent track record on execution," Nguyen wrote in the note. "Despite current macro-related uncertainties, we believe that Workday should be able to sustain its top-line momentum in [2023], backed by its backlog growth."
Workday (WDAY) shares were up nearly 7% to $244.21 in mid-day trading on Tuesday.
In addition, Nguyen raised the firm's revenue estimates for 2023 and 2024, as it now expects Workday (WDAY) to generate $6.2 billion in sales in 2023 and $7.3 billion in 2024, "to reflect the strong momentum backed by solid backlog growth."
Earlier on Tuesday, investment firm Monness, Crespi, Hardt raised its earnings estimates on Workday (WDAY), citing the strong earnings and guidance.