09:45 AM EDT, 08/23/2024 (MT Newswires) -- Workday's (WDAY) fiscal Q2 beat and new financials outlook highlight underappreciated aspects of the company's story, Oppenheimer said Friday in a note to clients.

Oppenheimer cited the company's "durable top-line and margin growth, an upper echelon margin trajectory for horizontal enterprise software companies, and highly efficient Capex."

Workday reported late Thursday fiscal Q2 non-GAAP earnings of $1.75 per diluted share and revenue of $2.09 billion, both above consensus estimates.

"Bullishly, management significantly raised the efficiency outlook for the business over the next two fiscal years (i.e., margin and cash generation) while lowering the subscription revenue growth outlook to a midteens percentage from high teens to reflect continuing deal scrutiny and less customer hiring," analysts said in the note.

However, the new outlook still leaves Workday with the "same mid Rule of 40's profile despite a weaker macro outlook, and with more cashflow," the investment firm said.

Oppenheimer reiterated its outperform rating with a $300 price target on the stock.

Workday shares were up more than 14% in early trading Friday.

Price: 263.72, Change: +32.64, Percent Change: +14.13