Analyst Note| Julie Bhusal Sharma |
Wide-moat Workday beat FactSet and our non-GAAP EPS expectations nicely in its second-quarter results thanks to even heartier digital acceleration of HR and finance software than Workday had forecast. With results came improved outlook for the year because of the surprisingly stronger momentum being seen. We think that the stronger growth expected for the year will moderate growth levels slightly in latter forecast years within our model. As a result, we are maintaining our fair value estimate for wide-moat Workday of $229 per share. We consider Workday to be fairly valued, as shares have risen by 6% to approximately $261 per share upon the news.