Workiva Inc. WK recently teamed up with Anaplan, a globally recognized name in Connected Planning. The partnership is related to streamlining the process of performance management reporting. Workiva's flagship product, Wdesk cloud platform, is now integrated with Anaplan's Connected Planning platform.
Data integration into Wdesk from Anaplan will enhance its capabilities. Workiva aims to provide users with latest and exhaustive solution that organizes, automates and revamps complex accounting and finance processes.
Matt Rizai, Chairman and CEO of Workiva said, "Anaplan enables our customers to connect critical planning data directly to Wdesk, which becomes a central repository of trusted management and regulatory reporting data, with powerful linking, auditability and control features."
We believe that these additional features of the Wdesk platform will boost its adoption rate going forward, consequently bolstering growth. Expanding Clientele Drives Growth
Shares of Workiva have returned 54.8% in the past year, significantly outperforming the industry
's 37.7% rally.
This can be attributed to Workiva's expanding customer base. The company had 3,063 customers as of Dec 31, 2017, a net increase of 291 customers from Dec 31, 2016. Exiting the fourth quarter, the company had 324 customers with an annual contract value (ACV) of more than $100,000, up 37% from 236 customers at the end of the year-ago quarter.
Moreover, the company had 146 customers with an ACV of more than $150,000, up 52% from 96 customers at the end of the year-ago quarter.
Solid Long-term Growth Prospects
Workiva continues to spend heavily on developing enterprise wide Wdesk platform. Investments are focused on additional functionality, greater scalability, data connectors, talent training, packaging, partnerships and other initiatives. These are expected to drive top-line growth in the long haul.
Moreover partnerships like Anaplan will help Workiva tap the growth opportunities that the fast-growing Software-as-a-Service (SaaS) market presents. Per an IDC report, the market is expected to be worth more than $112.8 billion by 2019, at a CAGR of 18.3%.
Recently, The Financial revealed that as per a Market Insights Report, the global financial services application market will be worth $117.1 billion by 2023 from $74.35 billion as of 2017. Notably, the market is currently growing at a CAGR of 7.86% and the time period under consideration is 2018-2023. We believe that since Workiva's platform is mostly used by auditing and accounting firms, the company will benefit from growth of the relevant market.
Stiff Competition, Higher Spending to Hurt Margins
Workiva faces intensifying competition in the Global Financial Service space from Oracle Hyperion Planning, SAP Business One, Accenture Financial Services, to name some.
Moreover, higher spending on product development is likely to keep margins under pressure at least in the near term.
Zacks Rank and Stocks to Consider
Workiva carries a Zacks Rank #4 (Sell).
In the internet software industry, Paycom Software, Inc. PAYC , Veeva Systems, Inc. VEEV and Nice Systems, Ltd. NICE are better-ranked stocks worth considering. While Paycom and Veeva sport a Zacks Rank #1 (Strong Buy), Nice carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Long-term earnings growth rate for Paycom, Veeva and Nice are currently pegged at 25.75%, 17.00% and 12.50%, respectively.
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