Asset Manager Investing in Global Technology Sector

We're an asset management firm allocating our capital into asset classes benefiting from technological innovation and applications globally. We serve as a family office of a tech professional who has spent over a decade as an entrepreneur, operator, and venture investor across Asia and the US.

Our small team is made up of diverse investment professionals who research, identify, and execute relevant opportunities. We occasionally share some of our investment memos, insights, and analysis here.

Friday, July 3, 2020

Q2.2020 - Workday: Resilient Business Model And Sustainable Growth

  • Workday is an attractive investment opportunity, given its deep moat in the enterprise HCM and Financial Management, steady growth, and strong cash flow generation.
  • The sticky client base and its high-quality licensing business model will help in weathering the ongoing uncertainty.
  • We expect a sustainable +20% growth with potential operating margin expansion above its 16% target in the near term.

We believe that Workday (WDAY), the SaaS Finance and HR giant, presents an attractive long-term growth investment opportunity. Workday is one of the most disruptive players in the enterprise SaaS HCM (Human Capital Management) and Financial Management market. Over the last five years, revenue and FCF (Free Cash Flow) have grown by ~5x and ~9x consecutively. Despite being a +$3.6 billion-a-year business, Workday also still maintains a +20% growth with steady FCF profitability. In this first coverage of Workday, we will take a closer look at its high-quality business model and strategic go-to-market approaches, which we believe should allow the company to maintain its resilience and outperformance. We assign the stock an overweight rating.

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