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Investing.com - BMO Capital maintained its Outperform rating and $285.00 price target on Workday (NASDAQ:WDAY), currently trading at $219.01 with a market capitalization of $58.5 billion, following meetings with management, partners, and customers at the company’s recent user event. According to InvestingPro data, the company maintains strong financial health with a robust gross margin of 76%.
The firm highlighted several positive developments from the event, including Workday’s "blitz of AI-centric innovation," new partner announcements, clarity on AI pricing models, and the acquisition of Sana, which BMO described as "constructive updates."
BMO Capital expressed confidence in Workday’s newly announced FY28 financial targets, which include a free cash flow aspiration of $15 per share for fiscal year 2028.
This FCF target represents nearly double the expected FY25 levels, providing what BMO called a "robust north star" for the business going forward.
The firm believes these strong financial projections should help offset market concerns about macroeconomic uncertainty and potential competitive threats from both existing and emerging AI-focused competitors.
In other recent news, Workday has been the focus of several analyst assessments following its Rising conference and Analyst Day. Evercore ISI raised its price target for Workday to $300, citing the company’s strategic acquisitions and platform evolution aimed at fostering growth in an AI-centric environment. Meanwhile, TD Cowen adjusted its price target from $310 to $290, maintaining a Buy rating after Workday reset its medium-term growth expectations. Needham reiterated its Buy rating with a $300 price target, expressing confidence in Workday’s updated agentic strategy despite a reduced subscription revenue growth forecast for FY27.
Bernstein also maintained an Outperform rating with a $304 price target, highlighting Workday’s innovation and execution strategies. BofA Securities reiterated a Buy rating and set a $265 price target, noting Workday’s $1.1 billion acquisition of Sana and a new partnership with Microsoft. This partnership aims to integrate Azure AI Foundry agents into Workday’s Illuminate platform. Additionally, Workday introduced a flex credit pricing model for Illuminate, which could allow the company to benefit from increased agent usage. These developments reflect Workday’s ongoing efforts to adapt and grow in a competitive market.
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