Workday Analyst Day Takeaways

Analysts at Oppenheimer provided their takeaways from Workday, Inc. (NASDAQ:WDAY) analyst day, reiterating their outperform rating and $285 price target on the company’s shares.

According to the brokerage the company’s management committed to sustainable organic 20%+ subscription revenue growth on the path to $10 billion in revenue. The brokerage said that management's confidence is based on:

(1) an expanded product portfolio,

(2) continued momentum with Financials (now $1 billion in revenue),

(c) a large and under-penetrated international opportunity.

Analysts see a number of levers driving sustainable 20%+ subscription revenue growth, but 2023 operating margin Jan guidance/higher S&M intensity at scale calls into question potentially higher structural 24.6% customer acquisition costs going forward. The brokerage said it takes comfort in the longer-term operating $1,857 million margin framework of 25% at $10 billion in revenue.