UBS analyst Brent Thill (Buy, $111 PT)
"Like other leading SaaS vendors, WDAY saw no Q1 seasonal slowdown and delivered a strong beat & raise qtr. In particular, billings grew 94% y/y and 2% q/q (was expected
down 19% q/q) - beating UBSe by $43M and 26%; $15-20M worth of large new customers committed early, and full yr guide was raised $40M. Customer and deal metrics continue to improve, evidencing vast unmet demand that is filled as WDAY rolls out new functionality & products. In higher education sector, the Student pdt, which will not be complete until end of FY17/CY16, is driving clients to buy the full HCM/Fin'ls suite today. With ORCL & SAP still far behind in the Cloud, we expect WDAY to extend its lead and capture a large share of the $50Bn+ TAM from <$1Bn today."
BMO Capital Markets Joel Fishbein (Market Perform, $83 PT)
"Workday continues to demonstrate best-in-class growth and momentum continues to gain steam. We believe this set-up for the stock remains favorable even as numbers yet again move higher, and we expect upside remains to management's new FY15 targets. New customer additions continue to be strong in both core HCM as well as financials; however, progress with respect to new financial customers is steady, not inflecting, and it's important to note that much of the upside in the quarter appears to have been driven by government and education (rather than commercial) as well as professional services. At some point, we believe investors will need to see momentum in financials overtake that of core HCM. Overall, a strong quarter that leapt over a very high bar."
Canaccord Genuity analyst Richard Davis (Buy, $105 PT)
"Even by the high standards of Workday's historical execution, the firm posted exceptional results on literally every metric. The firm saw better-than-expected success in terms of financials wins and some pull-forwards of a few large deals. This is a good thing because front-end loaded years are always better than back-end loaded ones. Workday remains an extremely high quality, high growth large cap stock that has corrected less than its comps. In our experience, you buy these types of stocks once the market stabilizes. BUY."
Oppenheimer analyst Brian Schwartz (Outperform, $110 PT)
"Workday reported a very impressive 1Q beat and raise. Beyond the 94% reported billings growth, other metrics were impressive too, including 73% growth in short-term deferred revenue, record number of new customer wins, and adding Cushman and Wakefield and Nationstar Mortgage as new financials logos. Big deals partially drove the quarter upside, consistent with our preview, and support our thesis that Workday is exceptionally positioned to become the next tier 1 supplier by replacing aging enterprise systems with integration issues (analysis/reporting/ support) for the inevitable rearchitecting of business applications for cloud, mobile, social, data. Bottom Line: We view WDAY as the preeminent SaaS vendor this decade and believe it's successfully executing in its markets with a significant runway for growth."
--Written by Chris Ciaccia in New York
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