"Those who sell this do not understand the long-term plans of this company," said TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio.
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After reporting revenue growth of 68% in the quarter, Workday management provided in-line fourth-quarter guidance, while adding that fiscal 2016 sales are unlikely to be in excess of 40%.
As a result, people are "freaking out" and lowering price targets, Cramer said on CNBC's "Cramer's Mad Dash" segment. Let's not forget, this "amazing" company is still growing at an incredible rate and continues to win big contracts, he said.
However, he acknowledged that when high-growth companies lower expectations, the valuation -- and the stock price -- go lower as well.
Netflix (NFLX) is another growth stock that recently disappointed investors. Shares are down 28% in the past three months and 5.7% this year. The stock was downgraded by Stifel Nicolaus from buy to hold.
For this reason, these types of companies can't afford to disappoint investors about their growth. In Netflix's case, that means subscriber growth needs to be strong. In the most recent quarter, the company didn't deliver.