Workday Inc. shares /zigman2/quotes/201157610/composite WDAY +0.48% are off more than 11% in Wednesday morning trading and pacing the declining software sector after the company held its user conference and analyst day. Several analysts flagged the company's commentary on its human-capital management product, which Workday expects to end the year with 20% growth, marking a slowdown. "Financials will need to continue to grow at healthy rates to offset this," wrote Jefferies analyst Brent Thill, though he said the attachment rate of financials to the core product is relatively low, suggesting opportunity. While Workday also announced some new products, Macquarie analyst Sarah Hindlian questioned the revenue potential for some of them. "For example, blockchain-enabled Workday Credentials allows verification of credentials such as employment and educational history," she wrote. "We think this is likely a limited market opportunity." Another issue for Workday is that its chief executive commented that the company has "definitely seen some delays" in deal activity, but Workday doesn't expect these to impact the business or result in cancellations. Other software stocks are getting hit in Wednesday trading as well, including Slack Technologies Inc. /zigman2/quotes/212180539/composite WORK +7.71% , which was the subject of a price-target cut at Morgan Stanley, and Adobe Systems Inc. /zigman2/quotes/200389143/composite ADBE +1.78% , which received a Citi Research downgrade. Shares of Okta Inc. /zigman2/quotes/210420951/composite OKTA +6.34% , Splunk Inc. /zigman2/quotes/203060494/composite SPLK +3.24% , Zoom Video Communications Inc. /zigman2/quotes/211319643/composite ZM +9.74% , and Atlassian Corp. PLC /zigman2/quotes/207177221/composite TEAM +3.91% are also down. The iShares Expanded Tech-Software ETF /zigman2/quotes/201870252/composite IGV +2.16% is off 2.3%, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.48% has lost 0.1%.
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Cloud software stock slammed amid Workday fears, Morgan Stanley doubts