The working day falls flat with slow growth, lagging offers
workday (NASDAQ: WDAY) is another example of a solid but high-flying company that achieves its goal. The company did not produce a bad quarter, but first-quarter results and outlook suggest that the company’s growth and earnings are priced higher. The most obvious evidence in favor of this perspective is analysts who have been setting their goals and pushing stock prices.
MarketBeat.com – MarketBeat
To be fair, the 30 analysts covering Workday still have it tied to a Buy company. The consensus rating has been stable over the past year, but the Marketbeat.com price target has not. At least 22 comments have been posted since the first quarter results were announced, each with a target price reduction. The range of targets is wide, but the average is below the broad consensus of $ 253.27. This target is still around 60% above price action, but has dropped 20% in the last three months and 17% in the last 30 days alone. Based on the outlook for economic activity in the second half, it is possible that these targets will be reduced again. The report concludes that portfolio growth is slowing and bids are lagging behind, with conditions that we see worsening in the face of inflation and higher interest rates.
Mixed Day Reports Quarterly
Workday had a good quarter of that, no doubt. The company generated revenue of $ 1.43 billion with a gain of 21.2%, but there is a problem with the comparisons. Analysts had expected revenue of about $ 1.43 billion, so there is no catalyst for higher stock prices in the news. The gain was driven by a 23.2% increase in subscription revenue, which was also expected and the news does not improve below the report. Investment in operations, as well as inflationary pressures, reduced the operating margin by 440 basis points. This was more than expected and left earnings adjusted below expectations and worse, on a year-on-year basis despite the growth of the top line.
The factor that caught the analyst’s attention, however, is the growth rate of the backlog. The 2-year subscription portfolio rose 20.9% year-on-year, which is strong, but fell more than 400 basis points relative to total portfolio growth. This suggests a slowdown in the growth of a highly valued company that is a catalyst for price correction, in any case.
Privileged people and institutions sell working hours
Privileged people and institutions still have quite a few Workday stocks, but the property trend is decidedly bearish. Privileged people and major shareholders own about 21.75% of the shares while institutions (including major shareholders) control more than 70% and both groups sell. Together, the privileged people and the institutions have sold an amount worth about 25% of the current market capitalization and we do not see that the trend will end without any change in prospects. As it stands, stock price action is at its lowest levels since the bottom of the pandemic and could go down.
On the stock chart, price action shows signs of support near $ 150, but indicators remain bearish. We look forward to seeing you at least re-try your recent and possibly broken down. If the price action moves below $ 150, a move in the range of $ 120 to $ 140 is expected. However, if the $ 150 support is confirmed, we expect a new trading range to be established. 