Apps & Software

Goldman Sachs Says Buy Massive Software Weakness Now: 4 Top Stock Picks


This company rounds out the top picks at Goldman Sachs in the cloud software space and is another industry leader. Workday Inc. (NASDAQ: WDAY) provides enterprise cloud applications worldwide. Its applications help its customers to manage critical business functions and optimize their financial and human capital resources.

Its Workday Financial Management application provides functions of general ledger, accounting, accounts payable and receivable, cash and asset management, revenue management and grants management, as well as project and resource management, time and expense tracking, project billing, revenue recognition, financial reporting and analytics.

It also provides Workday Human Capital Management application, which includes human resources management, such as workforce lifecycle and organization management, compensation, absence and employee benefits administration. It also includes global talent management, comprising goal and performance management, succession planning and career and development planning, as well as Skills cloud, a machine-learning-powered universal skills language to help source, utilize, develop and retain talent.

The analysts noted this about the stock’s potential:

Workday is a uniquely positioned software application company addressing massive cloud replacement cycles in a $105 billion+ total addressable market spanning human capital management (HCM), financials, analytics, planning, and procurement. The pandemic is driving customers to accelerate their digital transformation efforts so that they can operate their businesses virtually in the cloud, where we believe Workday remains well positioned to capitalize on rising cloud adoption particularly within Financials. Within HCM, we continue to view Workday as best in class with the ability to innovate and deliver new feature functionality in response to customer demand, like People Analytics, People Experience and the Talent Marketplace. Similarly, we believe the company is well positioned within cloud based financials, with an expanding portfolio of products, including procurement and planning, offering multiple paths to establishing presence within the large enterprise.

Goldman Sachs has set a $345 price target on Workday stock. The $333.59 consensus target compares with Monday’s closing share price of $269.70.

Four top software stocks for investors with plenty of risk tolerance to consider for aggressive growth portfolios. Given the current volatility and the potential for end-of-the-year selling, it may make sense to scale buy positions over a few weeks or even months to get the best pricing for new positions.

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