Tag Archives: crm

Workday May Hit $5 Billion In 5 Years As Financial Software Rises

At the rate Workday ( WDAY ) is growing its core human capital management (HCM) software, combined with its new financial management products, analysts Ross MacMillan and Matthew Hedberg can see Workday’s path to $5 billion in yearly sales by 2021. The company just hit it first billion-dollar year, closing its fiscal year ended Jan. 31 with sales of $1.16 billion. The pair of RBC Capital Markets analysts on Sunday raised their price target on Workday stock to 92 from 72 and affirmed their outperform rating. Workday stock rose a fraction Monday to a 2016 high, making its seventh consecutive up-day, closing at 78.92. Last week, Workday stock broke out of a cup-with-handle at a 75.60 buy point. Workday wasn’t alone Monday. Rival ServiceNow ( NOW ) rose 3.6% to 64.28 on a bullish report from William Blair on its long-term fundamentals. Bigger enterprise software rivals Salesforce ( CRM ), Oracle ( ORCL ) and SAP ( SAP ) all slipped a fraction. RBC’s MacMillan and Hedberg drew confidence by comparing Workday to PeopleSoft in 2001, four years before its HCM and financial management (FM) software businesses were acquired by Oracle for $10.4 billion. PeopleSoft co-founder David Duffield, who fought the Oracle takeover, went on to co-found Workday. “A look back at PeopleSoft is striking,” they said. “Workday today has (less than) 25% of PeopleSoft’s customer count in 2001, yet Workday has (more than) 50% of PeopleSoft’s revenue at that time. This is particularly interesting, given Workday has yet to generate any meaningful financial management revenue today and which (according to management) was (more than) 50% of PeopleSoft’s revenue at the time of acquisition by Oracle.” In other words, the RBC analysts say, Workday has plenty of room to grow. “Success in financials would support a path to $5 billion,” they wrote. “While financials (are) not the focus in this note, we think the path to $5 billion revenue remains underpinned (split less than 50% HCM, more than 50% FM) which we think can be realized in the next 5-plus years.” For its fiscal 2016 ended Jan. 31, Workday revenue rose 48% to $1.16 billion. It lost 1 cent per share minus items, a huge improvement from a 33-cent loss in fiscal 2015. Analysts polled by Thomson Reuters expect a Q1 per-share loss minus items of 2 cents, on revenue up 35% to $339 million. They expect adjusted profit to break into the black in Q3.

After Hours: Allergan, Tesla Motors, Walt Disney Shares Fall

Allergan ( AGN ) tumbled on new tax inversion rules, Tesla Motors ( TSLA ) skidded on weak Q1 deliveries and Walt Disney ( DIS ) retreated as a key executive exited, raising doubts about who might be the eventual successor to CEO Bob Iger. Allergan stock fell 21% after the Treasury Department issued new rules to curb so-called tax inversions. That includes steps to curb earnings stripping, a method used to reduce taxes after an inversion. Pfizer ( PFE ) and Ireland-based plan to merge, with Pfizer’s takeover structured to reduce U.S. tax liability. Pfizer stock edged higher late after closing up 2.3%. Allergan had closed 3.5% higher. Tesla Motors said that it delivered 14,820 vehicles in Q1, up nearly 50% vs. a year earlier but below the company’s February forecast for 16,000. Tesla blamed “severe” parts shortages for the Model X crossover — and its own “hubris.” Tesla shares fell 4% late, erasing nearly all its 4% regular-session gain on huge preorders for the Model 3. The Model 3 is supposed to go into production by late 2017, with total vehicle production hitting 500,000 by 2020. Walt Disney said after the close that COO Thomas Staggs, who was seen as a possible successor to CEO Bob Iger, is leaving May 6. Staggs will serve as a special advisor to Iger. Disney stock fell 2% after closing down 0.4%. Meanwhile, Salesforce.com ( CRM ) agreed to buy artificial intelligence startup MetaMind for undisclosed terms, the latest big tech to step up AI takeovers and investments. Salesforce CEO Marc Benioff invested in MetMind back in December 2014. Salesforce stock was little changed late.

Workday Financial Software Heading For ‘Success’; Stock Gains Again

Building momentum from a week of positive trade, cloud software developer Workday ’s ( WDAY ) stock gained another 1% Friday morning — nearly 8% for the week — after FBR Capital Markets satisfied itself that Workday’s financial software may “achieve the same level of success as (or greater than) its HCM (human capital management) product suite.” In a research note issued Friday, FBR analyst Samad Samana said that he visited Workday’s Pleasanton, Calif., headquarters in Silicon Valley this week and cornered Betsy Bland, vice president of financial management products, and Robynne Sisco, chief accounting officer, who let him “dig deeper into what we have found to be the single most important issue on investors’ minds.” The issue: Will Workday’s financial software do great? “We walked away more confident that the financials business is positioned to have a strong (fiscal 2017) as the product suite has improved significantly, more WDAY reps are now selling financials, a critical mass of live customers is providing positive references for potential customers, and the willingness to adopt cloud-based financials has increased,” Samana said. Investors responded by pushing Workday stock up 2% to 78.34 before easing back to a 1.6% gain above 78 by midday in the stock market today . On Wednesday, Workday stock broke out of a 12-week, first-stage cup-with-handle base with a 75.60 buy point. Workday competes against no shortage of rivals, including SAP ( SAP ), Salesforce.com ( CRM ) and legacy software developer Oracle ( ORCL ). Salesforce stock was up 1.6% to 74.98 at midday Friday, and Oracle was up fractionally at 40.96. But SAP stock was down 0.8% to 79.74. Samana said he learned that Workday had added more than 45 financial software customers in the fiscal fourth quarter ended Jan. 31, “the most ever in a single quarter.” At 207 financial customers, it’s more than double the base of a year before. For Q4, Workday earnings beat Wall Street views, but its Q1 revenue outlook missed estimates. For fiscal Q1, ending in April, analysts polled by Thomson Reuters expect Workday to lose an adjusted two cents per share minus items, flat with a year earlier, on revenue up 35% to $339 million. Workday went public in October 2012, priced at 28.