11:45 AM EST, 11/27/2024 (MT Newswires) -- Workday (WDAY)'s valuation is too attractive too ignore at the current levels despite the likely hit to investor confidence from lower fiscal 2026 subscription revenue growth guidance, analysts from Morgan Stanley said in a Wednesday note to clients.

The company trimmed its subscription revenue growth revenue estimate to 14% from roughly 15% for fiscal 2026.

While investors' "frustration in management's inability to de-risk their guidance" is understood, the company's current levels are "too attractive to ignore" amid improving market conditions, the analysts said.

Despite the lower guidance, Workday mentioned, that there has been no deterioration in their underlying business and thus it is difficult to understand Workday's "core franchise value," the analysts said.

Workday has a 98% enterprise subscription retention rate, while its upsell motions are also "gaining traction" and its number of partners who resell or refer the business has also climbed five times over the past 18 months, according to the note.

Morgan Stanley raised Workday's price target to $330 from $315 and maintained an overweight rating on the stock.

Shares of the company were down 8.3% in recent Wednesday trading.

Price: 247.91, Change: -22.28, Percent Change: -8.25