Workday (WDAY) Stock

Even though growth expectations are lower, I still recommend buying WDAY because of its low expectations and the chance for a positive change if growth reaches 16%. In the third quarter of 2024, WDAY's revenue increased by about 16% compared to last year, thanks to strong demand for AI solutions and a better go-to-market strategy, which raises hopes for future growth. Investors should keep an eye on overall economic conditions and possible challenges ahead.

Workday, listed on NASDAQ as WDAY, has reduced its full-year forecast, which is not a positive sign. Nevertheless, the company still anticipates strong double-digit growth and aims to maintain this momentum next year. As a result, the recent drop in its stock price could present a good buying opportunity.

Last week, Workday (WDAY -1.35%) experienced a drop in its share price after the company's forecast for fiscal 2025 Q4 did not impress investors. Currently, the stock has decreased by around 6% since the beginning of the year.

Strong demand in education, public services, healthcare, and financial services helps WDAY's revenue in the third quarter of the fiscal year.

Workday anticipates consistent growth in its Subscription business in the coming quarters, thanks to a larger market share, a commitment to innovation, and more efficient operations.

I maintain my "buy" recommendation for Workday, setting a price target of $336, as the demand for its AI solutions increases along with rising profit margins. In its Q3 FY25 earnings, Workday reported a 15.8% increase in revenue and a 23% rise in earnings compared to last year, thanks to more customers using its full-suite solutions for better returns. Although the FY25 revenue forecast has been slightly reduced, the management is still optimistic about reaching their FY27 goals, backed by a strong AI product lineup and partnerships.

Sarat Sethi, the Managing Partner at DCLA, appears on CNBC's "Halftime Report" to discuss his decision to purchase more shares of Workday as their prices drop following the earnings report.

On Wednesday, Workday (WDAY) shares dropped by 8% after the company forecasted that its full-year subscription services revenue would be lower than anticipated. This news came just a day after their announcement.

WDAY has announced impressive results for the third quarter of fiscal 2025, driven by an increasing need for human capital and financial management solutions in various industries.