Please ensure Javascript is enabled for purposes of website accessibility

Why Workday Stock Popped Today

By Evan Niu, CFA – Aug 26, 2020 at 1:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Jefferies boosts its price target on the HR specialist ahead of its earnings release tomorrow.

What happened

Shares of Workday (WDAY -0.85%) have popped today, up by 9% as of 12:20 p.m. EDT, after a Wall Street analyst released a bullish research note. Enterprise software stocks are also broadly rallying following a blockbuster earnings release from salesforce.com.

So what

Jefferies boosted its price target on Workday from $180 to $195, which was just slightly above yesterday's close and below current prices. "We remain fundamental fans of WDAY's broad product portfolio and believe that spend will inevitably come back as we recover," analyst Brent Thill wrote in a research note to investors. However, the ongoing macroeconomic uncertainty related to the COVID-19 pandemic could impact broader IT spending and lead to delays in inking deals in the short term.

Workday logo on a wall in the lobby of headquarters

Image source: Workday.

Salesforce, which is about to join the Dow Jones Industrial Average next week, reported blowout results yesterday evening, spurring a rally among tech stocks today, particularly those in the same sector of selling critical software to enterprises. That includes Workday, which offers a cloud-based human resources (HR) platform.

Now what

Workday is set to release fiscal second-quarter results tomorrow after the market close. Analysts are expecting the company to report $1.04 billion in sales and earnings per share of $0.66. That sales forecast is mostly in line with Workday's own guidance, which calls for subscription revenue of $913 million to $915 million and professional services revenue of $128 million. CFO Robynne Sisco previously reassured investors that it had "measures in place that help reduce near-term volatility from employment changes."

Evan Niu, CFA owns shares of Salesforce.com. The Motley Fool owns shares of and recommends Jefferies Financial Group Inc., Salesforce.com, and Workday. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Workday, Inc. Stock Quote
Workday, Inc.
WDAY
$155.51 (-0.85%) $-1.34

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
107%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.