10 Best SaaS Stocks To Buy Now

4. Workday, Inc. (NASDAQ:WDAY)

Number of Hedge Fund Investors In Q1 2024: 83

YTD Return: -24.1%

Workday, Inc. (NASDAQ:WDAY) provides SaaS software to enable businesses to manage their human resources, contract management, and other operations. June 2024 has been an important month for the firm. It has seen Workday, Inc. (NASDAQ:WDAY) land itself on the illustrious Fortune 500 list of America’s biggest companies, and announce a deal with AI giant Google to develop a new AI application. However, the tail end of May was a bad one for its investors, as it saw Loop Capital join other analysts in cutting Workday, Inc. (NASDAQ:WDAY) ‘s share price target. Loop Capital reduced the share price target to $240 from $280 and kept a Hold rating on the shares. While the firm admitted that Workday, Inc. (NASDAQ:WDAY) commands several advantages in the multi billion dollar human capital management market, the price target cut reflected Loop Capital’s belief that spending in this segment will be tight. The latest round of price target cuts came after the shares tanked by 15% following the latest earnings report due to a miss in billings.

The average of 33 one year analyst share price targets for Workday, Inc. (NASDAQ:WDAY) is $276.69. This marks a 32% upside over the recent closing share price of $209.48. Workday, Inc. (NASDAQ:WDAY)’s three year annualized growth rate is modest when compared to other SaaS stocks on our list since it is 18.90%. Clearbridge Investments mentioned the firm in its Q1 2024 investor letter. Here is what the firm said:

During the first quarter, we continued to trim IT stocks into strength to manage risk while also adding to high-conviction positions. For example, we trimmed our active weight in Palo Alto Networks after the information security software maker lowered its guidance in part due to a new emphasis on providing short- term discounts on product bundles to pursue its consolidation opportunity more aggressively. While this strategy should position the company more strongly in the future, it potentially increases volatility in operating results in the near-to-medium term. Part of the proceeds were redeployed into enterprise resource planning and finance software maker Workday, as we believe its products are well-positioned for consistent, robust subscription growth with potentially further upside as new investment initiatives scale.