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Investing.com - Bernstein lowered its price target on Workday (NASDAQ:WDAY) to $304.00 from $325.00 on Friday, while maintaining an Outperform rating on the stock. The target remains above the current stock price of $227.58, with analyst targets ranging from $220 to $340.
The firm’s decision followed what it described as "an okay quarter" for the cloud-based enterprise software provider, which delivered in-line results with a slight beat on subscription revenue and approximately one percentage point on margins. According to InvestingPro data, Workday maintains a healthy 75.6% gross profit margin and has achieved 14% revenue growth over the last twelve months.
Workday’s stock fell approximately 4% in after-market trading as the company provided guidance that Bernstein characterized as "unimpressive," despite management’s enthusiastic commentary regarding the second half of fiscal 2026. InvestingPro analysis shows the company maintains strong fundamentals with a "Good" Financial Health score and holds more cash than debt on its balance sheet.
Bernstein reduced its target price-to-forward-earnings multiple from 28x to 25x, citing a broader step-down in peer group valuation, while maintaining its positive outlook on the company.
The firm noted it continues to like Workday’s story given the durability of its business, margin improvement, and potential upside from artificial intelligence implementations.
In other recent news, Workday has reported its second-quarter financial results, showing strong performance in subscription revenue, backlog, and margins. The company has increased its fiscal year 2026 subscription revenue guidance to $8.815 billion, indicating a 14.2% growth year-over-year. Despite this, Oppenheimer has lowered its price target for Workday to $270 from $300, citing "group multiples compression" rather than concerns about the company’s fundamentals. Meanwhile, Mizuho (NYSE:MFG) has reiterated an Outperform rating with a $275 price target, reflecting confidence in Workday’s recent results.
Needham also maintained its Buy rating and $300 price target, highlighting that Workday’s current remaining performance obligation growth exceeded expectations due to early renewals. On the other hand, Stifel has reduced its price target to $255, noting a lack of significant acceleration in the company’s business momentum. DA Davidson has further lowered its price target to $225, maintaining a Neutral rating after Workday’s earnings beat but with unchanged forward guidance. These developments reflect varied analyst perspectives on Workday’s future performance.
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