Core Insights - Workday, Inc. is experiencing strong momentum in the retail and hospitality sectors, driven by new customer acquisitions and AI innovations aimed at supporting frontline workers [1][3] - Over 1,800 retail and hospitality companies globally are utilizing Workday to enhance hiring speed, operational efficiency, labor cost control, and staffing alignment with customer demand [1] Group 1: Product Innovations - Workday integrates HR and finance on a single platform, providing real-time insights into scheduling, labor costs, and staffing needs, which streamlines operations for managers and frontline workers [2] - The demand forecasting feature in Workday Scheduling and Labor Optimization employs AI to analyze historical data, resulting in up to a 67% reduction in time required to create or update weekly schedules [4] - The Workday Frontline Agent facilitates last-minute shift swaps and staffing changes, allowing managers to reduce time spent on these tasks by up to 90% [5] Group 2: Hiring Solutions - Workday's acquisition of Paradox enhances the hiring process for retail and hospitality organizations, enabling faster connections with candidates and simplifying the hiring experience [6] - Tools like the Paradox Candidate Experience Agent and Conversational ATS streamline up to 90% of hiring tasks, leading to conversion rates exceeding 70% and time-to-hire as low as 3.5 days [7][8] Group 3: Market Position and Future Plans - Workday will showcase its workforce management innovations at the National Retail Federation's Big Show 2026, highlighting its comprehensive suite of solutions [9] - The demand forecasting functionality is set to be available by late January 2026, while the Workday Frontline Agent will launch in Spring 2026 [10]

Summary of Software Equity Research Conference Call Industry Overview - The software sector is currently experiencing a deceleration in growth, lagging behind other sectors such as semiconductors. The recommendation is to stay underweight in software investments as AI monetization is expected to be gradual, with significant growth contributions needed to alleviate fears of AI disintermediation [1][2][14]. Key Companies and Recommendations Mega Cap - **Microsoft (MSFT)**: Rated Buy with a price target of $675. Expected to benefit from strong AI tailwinds and backlog growth, with potential EPS exceeding $22 by FY28 [54]. - **Meta (META)**: Rated Buy with a price target of $910. Anticipated to outperform due to AI investments and potential revenue growth from WhatsApp and other platforms [58]. Large Cap - **Amazon (AMZN)**: Rated Buy with a price target of $300, up from $275. Expected to recover from underperformance in 2025, with AWS sales accelerating due to improved AI capabilities [55]. - **Oracle (ORCL)**: Rated Buy with a price target of $400. Positioned to benefit from AI workloads and a significant backlog, despite concerns over AI-related debt [67]. Mid Cap - **Intuit (INTU)**: Rated Buy with a price target of $850. Strong historical performance and potential for growth in tax and small business software [61]. - **Unity (U)**: Rated Buy with a price target of $55. Expected to leverage AI for ad targeting, with significant growth potential [70]. Small Cap - **Upwork (UPWK)**: Rated Buy with a price target of $27. Anticipated topline acceleration after several negative quarters, supported by AI project tailwinds [73]. Core Insights - The software sector is expected to see a rotation from infrastructure to application software in the second half of 2026, with improved sentiment anticipated for application software [2][14]. - AI spending is a critical theme, with expectations that 2026 will see more AI projects moving to production, leading to tangible ROI [44][45]. - The overall sector valuation has returned to historical averages, indicating potential for multiple expansions as AI monetization begins to lift growth [41]. Additional Notable Points - Concerns about AI spending bubbles and debt funding needs have emerged, particularly in the second half of the year [28]. - M&A activity in the software sector is expected to accelerate, driven by low multiples and interest rates [18]. - The sentiment around application software is currently negative but is expected to improve as AI-driven monetization becomes more evident [45]. Conclusion - The software sector is in a transitional phase, with a focus on AI and infrastructure. Investors are advised to be selective, favoring large-cap companies with strong positions in AI and infrastructure while remaining cautious about application software until sentiment improves.

Core Insights - Hg has acquired OneStream for an equity value of approximately $6.4 billion, marking a return to private ownership just 17 months after its IPO, reflecting changing dynamics in the tech sector amid economic uncertainties [1][3] - OneStream provides an AI-enabled platform for enterprise finance management, serving major clients like Toyota and UPS, and competes with industry leaders such as Oracle and SAP [2][9] Company Overview - OneStream, founded in 2010, has evolved from Oracle's Hyperion technology into a unified system for streamlining financial processes for large organizations [3] - The company went public in July 2024 with an initial valuation near $6 billion but saw its market cap decline to about $4.48 billion by early January 2026 due to softer macroeconomic conditions [3] Acquisition Details - Hg will become the majority voting shareholder, with minority stakes held by General Atlantic and Tidemark, while KKR exits its position entirely [5] - The acquisition offers OneStream shareholders $24 per share, representing a 31% premium over the January 5, 2026 closing price and a 27% uplift from the 30-day volume-weighted average [5] Strategic Implications - Leadership continuity is assured with CEO Tom Shea remaining in charge, allowing OneStream to focus on AI-driven innovations without public market pressures [6] - Hg's involvement is expected to enhance OneStream's growth trajectory and AI capabilities, aligning with broader trends in fintech where AI integration is driving consolidation [6][8] Market Response - Following the announcement, OneStream shares surged over 28%, indicating a positive market reaction [7] - Analysts view the acquisition as a vote of confidence in OneStream's platform, suggesting it could reshape the competitive landscape and enable the company to capture more market share [9]

Core Insights - Euna Solutions has launched Euna Marketplace, a Workday Certified Integration, now available on the Workday Marketplace [1] - This integration allows organizations using Workday to utilize Euna Marketplace's functionality within its procurement platform, enhancing purchasing, compliance, and analytics [1] Company Overview - Euna Solutions is recognized as a leading provider of purpose-built cloud solutions specifically designed for the public sector [1] - The introduction of Euna Marketplace signifies a strategic enhancement in Euna's offerings, aimed at streamlining procurement processes [1]

Core Insights - Sustainable Growth Advisers (SGA) reported a negative return of -1.3% (Gross) and -1.4% (Net) for its U.S. Large Cap Growth Strategy in Q3, underperforming the Russell 1000 Growth Index which returned 10.5% and the S&P 500 Index which returned 8.1% [1] - The investment strategy focuses on high-quality growth businesses with expected mid-teens earnings growth, but faced challenges as lower-quality stocks and cyclical industries outperformed in the market [1] Company-Specific Insights - Workday, Inc. (NASDAQ:WDAY) was highlighted in SGA's investor letter, reporting a one-month return of -0.85% and a 52-week loss of 14.72%, with a market capitalization of $57.346 billion as of December 31, 2025 [2] - SGA liquidated its position in Workday due to signs of a deteriorating competitive environment, particularly with increased pressure from rivals like SAP, despite Workday maintaining its annual revenue guidance [3] - Workday reported total revenue of $2.432 billion in its fiscal third quarter of 2026, reflecting a year-over-year growth of 13% [4]

Core Viewpoint - The article provides an update on Workday (WDAY), emphasizing a bullish outlook on its AI products, partnership strategy, and WorkdayGO, while advocating for a fundamentals-based approach to value investing [1]. Group 1: Investment Philosophy - The company disagrees with the notion that low multiple stocks are inherently cheap, focusing instead on long-term durability and affordability [1]. - There is a preference for companies with steady long-term growth, no cyclicality, and a strong balance sheet [1]. - The article acknowledges the risks of investing in successful companies, particularly the potential to overpay, highlighting the importance of valuation [1]. Group 2: Market Potential - The company believes that in certain situations, the vast development runway of a company can make immediate price considerations less critical [1].

Core Insights - Workday, Inc. (NASDAQ:WDAY) is considered one of the most undervalued tech giants, with 75% of analysts recommending it as a buy, indicating strong market confidence [1] - The median price target for Workday is set at $280, suggesting an upside potential of 27.38% from current levels, with individual targets ranging from $230 to $326 [1] - The company has shown solid financial performance, with fourth-quarter revenue guidance exceeding investor expectations and operating margins aligning with consensus estimates [3] Analyst Ratings - Siti Panigrahi from Mizuho Securities reiterated a 'Buy' rating for Workday, maintaining a price target of $275, reflecting a 25% upside potential [1] - Freedom Capital Markets adjusted its price target for Workday to $280 from $290 while keeping a 'Buy' rating after the company's third-quarter fiscal 2026 results [2] Financial Performance - Workday enhanced its product offerings through the integration of Paradox and accelerated its AI agent ecosystem, contributing to its strong financial performance [3] - The company raised its full-year 2026 revenue outlook while maintaining its operating margin projections, indicating confidence in future growth [3] Emerging Risks - Freedom Capital Markets identified risks such as the normalization of organic growth, contributions from M&A affecting contracted revenue backlog, and potential integration issues with newly acquired assets [4] - Despite the positive outlook, there are concerns regarding the sustainability of growth and the impact of acquisitions on revenue [4]

Core Viewpoint - The declaration of December 26 as a federal holiday by President Trump has blurred the lines between holiday and regular business operations, creating a unique situation for various sectors of the economy [1][8]. Banking Sector - Most major commercial banks, including Chase, Bank of America, and Wells Fargo, are open and operating under normal business hours despite the federal holiday [2][9]. - The Federal Reserve is processing transactions, ensuring the core banking system remains functional [2][9]. - Some smaller community banks or credit unions may have opted to close in alignment with the federal holiday, but the majority of financial institutions are back to business [3][9]. Federal Services - Non-essential federal offices are closed on December 26 due to the presidential order, affecting services such as the Social Security Administration and passport agencies [5][9]. - Individuals needing to visit federal offices or handle IRS-related business will have to wait until the following Monday [5]. Postal and Delivery Services - The US Postal Service is fully operational on December 26, as it is an independent establishment not required to follow the same closure schedule as federal agencies [6][9]. - Private delivery companies, including FedEx and UPS, have resumed normal operations after closing on Christmas Day [7][9]. Stock Market - The New York Stock Exchange and Nasdaq are open, returning to a full trading schedule after a shortened session on Christmas Eve and a full closure on Christmas Day [7][9].

Core Viewpoint - Workday Inc. shares are currently trading at $216.85, reflecting a slight increase of 0.65% in the current session, but a decline of 18.55% over the past year, raising questions about potential undervaluation despite the company's performance [1]. Group 1: P/E Ratio Analysis - The P/E ratio is a critical metric for long-term shareholders to evaluate a company's market performance against historical earnings and industry benchmarks [5]. - Workday Inc. has a P/E ratio of 90.9, which is lower than the software industry average of 96.03, suggesting that shareholders may perceive the stock as underperforming compared to its peers or potentially undervalued [6]. - A low P/E ratio can indicate undervaluation but may also reflect weak growth prospects or financial instability, necessitating a cautious approach when using this metric [9][10].

Core Insights - The finance sector is experiencing a significant shift towards the integration of AI, moving from experimentation to proven enterprise-wide applications by 2026, with a focus on governance, data quality, and human judgment [1][2][3] Group 1: AI Integration in Finance - CFOs are expected to transition from viewing AI as a tool for efficiency to recognizing it as a strategic driver for business transformation [1][2] - AI will enable finance teams to provide real-time insights, enhance decision-making, and optimize capital allocation, moving beyond traditional automation [2][3] - The role of CFOs will evolve to become transformational architects, focusing on strategy and decision-making rather than merely financial gatekeeping [1][2] Group 2: Governance and Data Management - Strong governance and clean, trusted data will be critical for the successful implementation of AI in finance [1][3] - Organizations will need to prioritize data governance and process redesign to ensure the effective use of AI technologies [1][2] - The importance of human oversight and accountability in AI-driven processes will be emphasized to maintain quality and reliability [1][3] Group 3: Future of Finance Operations - AI is anticipated to disrupt low-value, transactional activities, allowing finance teams to concentrate on higher-value strategic work [5] - The integration of AI will facilitate real-time decision-making, enhancing forecasting and cash visibility while automating compliance processes [3][5] - CFOs will need to develop AI literacy to evaluate investments in AI platforms and guide their teams in adoption [3][5] Group 4: Market Dynamics and Competitive Edge - The market is currently saturated with overlapping AI tools, leading to a cautious approach among CFOs regarding broad AI adoption [5] - Predictive analytics and competitive benchmarking will become essential for anticipating market shifts and optimizing decisions [5] - Companies that embrace streamlined, integrated AI solutions are expected to gain a competitive advantage in the evolving financial landscape [5]