Workiva (WK) Stock Forecast & Price Target

Workiva Inc. demonstrates a robust outlook supported by an impressive gross margin increase of 73 basis points year-over-year, reaching 79.2%, which reflects the company's effective cost management and scalability. The strong net revenue retention rate of 112% highlights increased account expansion, alongside a notable rise in large contract customers with a 32% year-over-year growth among those contributing over $500K in annual contract value. Additionally, the company achieved significant revenue growth of 20% year-over-year in Q4, with a marked increase in total remaining performance obligations (RPO) of 25% year-over-year to $1,175 million, indicating sustained demand and a promising subscription growth forecast of approximately 20% for 2025.

Workiva Inc's financial outlook is negatively influenced by policy uncertainties, prompting a revision of its valuation multiple to a blended ~7.5x EV/Revenue, indicating a decrease in investor confidence. Despite achieving EBIT of approximately $15 million, which aligns with the upper end of company guidance, a decline in margins year-over-year reflects ongoing investment pressures, particularly in sustainability reporting. Additionally, the company faces significant risks including heightened competition, challenges in cross-selling to both existing and new customers, and uncertain returns from its internal growth initiatives, contributing to a potential downside price scenario of $61.