Eagle Capital Management, LLC on Workday, Inc.
Thesis
Workday is a deeply entrenched HCM and financial-software platform that Eagle believes is mispriced because of broad AI disruption fears. Current mid-teen margins are well below the 30% or higher level Eagle believes the business can ultimately earn. The founder's return to the CEO role is reinvigorating product development, and Eagle increasingly views AI as an offensive opportunity through geographic expansion, adjacent products and natural-language interfaces.
“we increasingly believe AI will be a net positive for their business, enabling them to play offense.”
Key risks
- AI makes software easier to build and could intensify competition.
- The thesis requires meaningful long-term margin expansion.