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Investing.com - Piper Sandler reduced its price target on Workday (NASDAQ:WDAY) to $220.00 from $235.00 on Friday, while maintaining an Underweight rating on the stock. According to InvestingPro data, analyst targets for Workday currently range from $220 to $340, with the company maintaining a GOOD financial health score.
The price target adjustment follows Workday’s recent quarterly results, which Piper Sandler described as "better-than-feared" but lacking sufficient upside to change investor sentiment toward the company, which is growing at approximately 13%. InvestingPro data confirms this growth rate, showing revenue growth of 13.94% over the last twelve months, with the company commanding a market capitalization of $60.76 billion.
The firm noted that Workday’s short-term subscription backlog growth improved to 16.4% year-over-year, compared to 15.6% in the previous period, but expressed concern about the company’s mixed outlook for the second half of the year. For deeper insights into Workday’s valuation and growth metrics, including 11 additional ProTips, subscribers can access the comprehensive research report on InvestingPro.
Workday raised its full-year subscription guidance by $15 million, but Piper Sandler pointed out this increase was solely attributed to the expected contribution from the Paradox acquisition, implying a $9 million reduction to the core business forecast.
The research firm increased its revenue estimates for Workday by $39 million this year and $58 million next year, factoring in two acquisitions, increasing payroll attach rates, and a fourth-quarter deliverable for the Defense Intelligence Agency, but lowered profit estimates on the assumption that incremental operating margin could be reinvested in mergers and acquisitions and internal research and development.
In other recent news, Workday’s second-quarter fiscal results have drawn varied responses from analysts. The company exceeded expectations in subscription revenue, operating margin, and remaining performance obligations, yet its guidance has led to mixed reactions. Mizuho (NYSE:MFG) reiterated an Outperform rating and raised Workday’s fiscal year 2026 subscription revenue guidance to $8.815 billion, indicating a 14.2% year-over-year growth. Cantor Fitzgerald also maintained an Overweight rating, citing AI renewals as a positive factor.
However, KeyBanc Capital Markets lowered its price target to $285, expressing concerns about Workday’s growth trajectory. Bernstein reduced its target to $304 due to what it described as unimpressive guidance, despite slightly exceeding expectations on subscription revenue. Oppenheimer decreased its price target to $270, attributing the change to "group multiples compression." These developments highlight differing analyst perspectives on Workday’s future performance.
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