03:03 PM EST, 11/27/2024 (MT Newswires) -- Workday's (WDAY) near-term headwinds are "primarily noise" and long-term thesis for the company remains intact, RBC Capital Markets said in a note emailed Wednesday.

Terming the company's Q3 results as "mixed," the firm noted that Workday's earnings benefited from upside in service revenue, while subscription revenue was only slightly ahead of estimates.

The firm also said that the company's current remaining performance obligation, or cRPO, upside was muted though not enough to spook investors as growth only decelerated by around 80 basis points to 15%.

Meanwhile, commenting on the company's lowering of full-year subscription guidance, RBC Capital said the headwind was quantified as $8 million to $10 million in fiscal Q4 which gave it confidence that the company's fundamentals were intact.

The firm said it saw a path to acceleration in the company's fiscal H2 as it benefits from "the significant displacement opportunity with legacy on-prem competitors" and potential with generative artificial intelligence agentic solutions baked in the product.

RBC Capital Markets maintained its outperform rating on the stock with a price target of $300.

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