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Saturday, RBC Capital Markets reiterated its Outperform rating on Workday shares (NASDAQ:WDAY), maintaining a price target of $340.00. The firm’s analysis followed Workday’s first-quarter financial results, which led to a roughly 7% decline in the company’s stock price in after-hours trading. According to InvestingPro data, the stock has fallen nearly 13% in the past week, though analysts maintain a bullish consensus with price targets ranging from $250 to $340. Despite a modest beat in Q1 earnings, Workday only reiterated its subscription revenue guidance, which did not meet some investor expectations.
The slight outperformance in the quarter was consistent with recent trends and was attributed to services and a modest overachievement in subscription revenue. Workday’s calculated remaining performance obligations (cRPO) exceeded Wall Street estimates for the second quarter in a row, indicating potential signs of stabilization within the company’s business.
In addition to the financial performance, Workday’s management provided updated guidance on the company’s operating margin for fiscal year 2026. They increased the operating margin outlook by 50 basis points, now expecting a year-over-year expansion of 260 basis points.
The company’s progress in artificial intelligence (AI) was also highlighted as a positive development. RBC Capital Markets noted early adoption trends in AI and the momentum Workday is building with its partner network, suggesting a favorable outlook for the company’s innovative efforts.
In other recent news, Workday has reported first-quarter fiscal 2026 earnings that exceeded analysts’ expectations, with an earnings per share (EPS) of $2.23 against a forecast of $2.01. The company also surpassed revenue predictions, reporting $2.24 billion compared to the anticipated $2.22 billion, marking a 13% increase year-over-year. Despite these positive results, Workday’s stock saw a decline in after-hours trading. Analysts at TD Cowen have adjusted their outlook on Workday, lowering the stock price target to $310 from $320 while maintaining a Buy rating, citing cautious spending and conservative forecasts. Meanwhile, JMP has maintained its Market Outperform rating with a steady price target of $315, reflecting confidence in Workday’s long-term prospects. The company’s subscription revenue grew by 13% to $2.06 billion, although this was a slowdown from the previous quarter. Workday continues to focus on its growth strategies, including advancements in artificial intelligence and expansion in international markets.
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