Is Now the Time To Buy Anaplan And Workday?

Analysts at Barclays believe Anaplan, Inc (NYSE: PLAN) and Workday, Inc. (NASDAQ: WDAY) are positioned for a solid second half of 2021, following underperformance relative to SaaS peers since the onset of the pandemic.

The Anaplan Analyst: Analyst Raimo Lenschow upgraded Anaplan from Equal-Weight to Overweight and raised the price target from $59 to $70.

Lenschow upgraded Workday from Equal-Weight to Overweight and raised the price target from $268 to $282.

The Anaplan, Workday Takeaways: Anaplan and Workday’s performance have lagged SaaS peers by 40% and 22%, respectively, since the onset of the pandemic, said Lenschow in a Tuesday note.

This is not because demand for their services is down, instead because of a few complex factors tied to their products, namely more extended sales times and implementation cycles, said the analyst.

Barclays conducted a CIO survey in the first half of 2021, which indicated a spending shift from near-term projects to longer-term digital transformations.

Notably, there was a “large sequential increase” for enterprise resource planning solutions, indicating Anaplan and Workday should begin seeing demand convert to bookings through the remainder of the year, said Lenschow.

SaaS companies such as Coupa Software, Inc. (NASDAQ: COUP), ServiceNow, Inc. (NYSE: NOW), and Microsoft Corp. (NASDAQ: MSFT) have reported acceleration in consumer spending on their resource and time-intensive digitally transformative services, said the analyst.

Additionally, a Barclays Value Added Reseller survey indicated that larger deals in the SaaS space are beginning to “inflect higher.”

PLAN, WDAY Price Action: Anaplan was down 0.74% to $56.33 at last check Tuesday. Workday was up 0.31% at $234.37.

Photo: courtesy of Workday.