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Workday Stock Climbs on Earnings Beat and Analysts See Momentum

Workday reports strong second-quarter earnings and guidance, leading analysts to mostly be bullish on the company.

Shares of Workday  (WDAY) - Get Workday, Inc. Class A Report were rising sharply premarket Friday after the company reported second-quarter earnings and subscription revenue guidance ahead of analysts' estimates. 

The stock was up 7.6% to $265.50 before the opening bell as analysts took a mostly bullish approach in evaluating the Pleasanton, California, enterprise cloud company. 

Analysts at Morgan Stanley maintained their overweight rating while raising the price target to $310 from $305 a share, saying that "Workday heads into the back half of fiscal 2022 with significant top-line momentum," according to Bloomberg. 

Oppenheimer analysts rated the company outperform while raising the price target to $285 from $265 as the strong results and management commentary "suggests improving demand across both HR and financials." 

BMO Capital Markets rated the company market perform, but raised the price target on the stock to $295 from $260 as the results were solid and the outlook "appears to be trending in the right direction as management raised revenue, margin, and free cash flow guidance."

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However, despite the positive results in the quarter, the firm still has "questions around the durability of human capital management (HCM) growth."

Workday reported second-quarter earnings of $1.24 a share on revenue of $1.26 billion, a 19% year-over-year increase. Analysts were expecting earnings of 77 cents a share on revenue of $1.24 billion. 

For the third quarter, the company said it expects revenue between $1.156 billion and $1.158 billion compared to estimates of $1.13 billion. 

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