Buy Workday as Demand Grows for Cloud Financial Software, Analyst Says

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Michael Short/Bloomberg


Workday

shares were getting a push on Tuesday from Piper Sandler analyst Brent Bracelin, who lifted his rating on the cloud-based enterprise software company’s stock to Overweight from Neutral, with a new price target of $275, up from $248.

The core debate around the shares of Workday (ticker: WDAY) has been around the rate of adoption for the company’s cloud-based financial software suite as growth in the company’s core HR software segment slows. But Bracelin is a bull about the company’s “FINS” financial software business—which competes with legacy enterprise resource planning (ERP) software vendors like

SAP

(SAP)— and he sees acceleration ahead as well in the core HR software business.

Bracelin sees multiple catalysts that could drive the stock higher in 2021. Among other things, he points out that Gartner sees the cloud-based enterprise resource planning (ERP) segment accelerating to 17% growth in 2022, from 3%

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Why Workday Is the New Revolution in HR Technology?

So there’s certainly quicker to value with fewer consultants and generally projects take shorter time. The second thing is there’s a workday delivered methodology, which all partners have to use. so only approved partners can work on implementation projects and every consultant from every part has to be certified on every new version of the product there’s less freedom to customize but in our experience it’s rare that customers can’t meet their needs through the configuration options available. One of the key issues is change management a workday implementation project is going to affect every employee at every level in the organization.

Communication appropriate to the different levels of the organization and to the different roles that people play is absolutely key. also the HR function itself is likely to be transformed people that have been doing a certain kind of work for years, may find their work changing significantly … Read More