Procore signs multi-year strategic collaboration agreement with AWS
Investing.com - Stifel has reduced its price target on Workday (NASDAQ:WDAY) to $255.00 from $275.00 while maintaining a Hold rating on the stock. According to InvestingPro data, the company currently trades at a P/E ratio of 123.8x, reflecting premium valuation metrics despite showing signs of being slightly undervalued based on comprehensive Fair Value analysis.
The firm cited a lack of real acceleration in the company’s underlying business momentum, despite Workday delivering a modest revenue beat and approximately 50 basis points of current remaining performance obligations (cRPO) upside. The company has maintained steady growth with revenue increasing by ~14% over the last twelve months, while demonstrating strong financial health with an InvestingPro Financial Health Score of "GOOD."
Stifel noted that Workday’s performance contrasts with accelerating growth at competitors Microsoft (NASDAQ:MSFT) D365 and Oracle (NYSE:ORCL) NetSuite/Fusion, which are each growing at approximately 20%.
The research firm pointed out that Workday’s fiscal year 2026 guidance increase was primarily due to the announced Paradox acquisition, which is expected to provide about $15 million benefit in the fourth quarter. Without this acquisition, subscription revenue guidance would have remained unchanged from the previous quarter.
Workday continues to face headwinds in core verticals including healthcare and education, with Stifel expecting subscription and bookings growth to likely remain in the low-to-mid teens range, even as artificial intelligence attach rates accelerate.
In other recent news, Workday reported its fiscal second-quarter 2026 results, posting non-GAAP earnings per share of $2.21, surpassing the analyst consensus of $2.11. The company achieved revenue of $2.35 billion, slightly above the $2.34 billion consensus, marking a 13% year-over-year growth. Despite these positive results, Workday’s forward guidance remained effectively unchanged, leading to several adjustments in stock price targets by analysts. DA Davidson lowered its price target to $225 while maintaining a Neutral rating. BMO Capital reduced its target to $285, citing a cautious outlook but kept an Outperform rating. Goldman Sachs decreased its price target to $280, maintaining a Buy rating, following subscription revenue growth of 14% and operating margins of 29%. BofA Securities also cut its price target to $265, noting that current remaining performance obligations exceeded expectations by 2.4%. JMP Securities reiterated a Market Outperform rating with a $315 price target despite the mixed results.
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