Nucor earnings beat by $0.08, revenue fell short of estimates
On Friday, JPMorgan analyst Mark Murphy adjusted the price target for Workday (NASDAQ:WDAY) shares, bringing it down to $295 from $310, while maintaining an Overweight rating on the stock. Currently trading at $238.01, the stock has experienced a significant 12.83% decline over the past week, according to InvestingPro data. The revision follows Workday’s first-quarter results, which showed a mix of positive performance indicators and cautious investor sentiment due to certain financial metrics and macroeconomic factors. With analyst targets ranging from $250 to $340, and 27 analysts recently revising their earnings estimates upward, the stock shows mixed signals for investors.
Workday reported a 12-month subscription backlog of $7.63 billion, a 15.6% year-over-year increase, and total revenue of $2.24 billion, marking a 12.6% year-over-year rise. Both figures slightly surpassed consensus estimates. The company maintains strong growth momentum, with InvestingPro data showing a robust 14.95% revenue growth over the last twelve months and a healthy gross profit margin of 75.66%. Subscription revenue also exceeded expectations, while the company’s pre-forma operating margin of 30.2% and GAAP-free cash flow of $421 million were notably above analyst predictions.
Despite the backdrop of heightened macroeconomic uncertainty, Workday has not observed a significant impact on its business growth prospects. However, the company is closely monitoring potential effects in specific areas, such as state and local government due to federal funding pressures and international business that might be affected by foreign companies reducing spending on U.S.-centric technology vendors. Workday also highlighted its strength across different regions and industries, with Technology & Media and Manufacturing verticals achieving over $1 billion in annual recurring revenue.
Looking ahead, Workday’s guidance for the second-quarter 12-month subscription backlog suggests a stable growth trajectory, with expectations slightly above consensus. The company maintained its fiscal year 2026 subscription revenue outlook of approximately $8.8 billion and a total revenue outlook of $9.5 billion, despite a slight foreign exchange headwind adjustment. For deeper insights into Workday’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through the detailed Pro Research Report available on InvestingPro.
Workday continues to innovate in artificial intelligence (AI), with significant customer adoption of its AI products and partner contributions to new annual contract value. The company remains focused on expanding its full-suite offerings, penetrating the midmarket, and leveraging AI momentum. With a high customer satisfaction level and strong competitive positioning, Workday aims to solidify its leadership in the cloud-first human capital management (HCM) platform space and expand its financial and potentially supply chain management functionalities.
In other recent news, Workday has reported its first-quarter earnings for fiscal year 2026, which revealed financial metrics surpassing consensus estimates. The company experienced a 13.4% increase in subscription revenue and an operating margin of 30.2%, both exceeding expectations. Calculated remaining performance obligations (cRPO) grew by 15.6%. Despite these positive results, Workday’s stock saw a decline as the company’s second-quarter guidance suggested a slightly conservative outlook. Analysts from Goldman Sachs have raised their price target to $300, while DA Davidson increased theirs to $250, maintaining a Neutral rating. Stifel adjusted their target to $275, citing typical outperformance in revenue and margins, but expressed concerns about the pace of core business bookings. Meanwhile, Bernstein reduced their price target to $325, retaining an Outperform rating, and highlighted the need for further evidence of growth acceleration. These developments reflect a cautious yet optimistic stance from analysts regarding Workday’s future performance, particularly in the context of artificial intelligence advancements.
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