Workday Inc. shares closed at a record high Friday after the cloud-software company’s strong outlook and beat on earnings Thursday pointed to better-than-expected demand for enterprise software.
Workday WDAY, +12.87% shares surged 12.9% to close at an all-time high of $164, their best day since March 1, 2016, after touching an intraday record of $166.19. In comparison, both the S&P 500 index SPX, +0.82% and the tech-heavy Nasdaq Composite Index SPX, +0.82% finished up 0.8%, while the iShares North American Tech-Software ETF IGV, +1.16% gained 1.2%. For the year, Workday shares are up 61.2%, compared with a 3.2% gain in the S&P 500, a 6.2% advance in the Nasdaq, and a 20.1% gain in the IGV ETF.
Late Thursday, the cloud-based human capital management, or HCM, software company reported quarterly results that topped Wall Street estimates and raised its outlook.
Of the 37 analysts who cover Workday, 18 have overweight or buy ratings, 15 have hold ratings, and four have sell ratings. Of those, 14 analysts hiked their price targets on the stock on Friday, making for an average target price of $160.29.
Late Thursday, Workday reported quarterly billings of $830.3 million, up 48% from the year-ago quarter, while analysts were looking for $736.7 million. The company also forecast revenue of $775 million to $777 million for the fourth quarter, and about $2.81 billion for the year.
Prior to the report, analysts had forecast fourth-quarter revenue of $756.1 million and full-year revenue of $2.77 billion. After the report, the consensus rose to $774.8 million for the fourth quarter, and $2.8 billion for the year.
On Thursday evening’s conference call, Workday Chief Financial Officer Robynne Sisco said the company expects subscription revenue of “approximately $3 billion to $3.01 billion.”
Analysts had been forecasting fiscal 2020 subscription revenue of $2.97 billion for