Workday stock price target lowered to $270 by Oppenheimer on growth concerns

Investing.com - Oppenheimer has reduced its price target on Workday (NASDAQ:WDAY) to $270 from $300 while maintaining an Outperform rating following the company’s second-quarter results. The company, currently valued at $60.8 billion, has demonstrated strong financial health with a 13.94% revenue growth over the last twelve months, according to InvestingPro data.

The price target adjustment comes after Workday delivered in-line financial performance for the quarter, with Oppenheimer noting the reduction reflects "group multiples compression" rather than fundamental business concerns. The company maintains robust financials with a healthy current ratio of 2.1 and more cash than debt on its balance sheet.

Workday showed positive momentum in artificial intelligence, with 100% net-new AI annual contract value (ACV) growth during the quarter, and the company’s partner channel net-new ACV contributions exceeded 20% for the second consecutive quarter.

Despite these strengths, Oppenheimer expressed concern about Workday’s second-half fiscal 2026 guidance, which the firm described as "uninspiring." The analyst noted that organic revenue guidance appears weaker than it was 90 days ago and was raised solely due to an acquisition.

Oppenheimer still views Workday as "a durable, profitable growth compounder at scale" with reasonable valuation multiples, supporting the maintained Outperform rating despite the lower price target. Based on InvestingPro’s Fair Value analysis, the stock currently appears slightly undervalued, with analysts maintaining targets ranging from $220 to $340.

In other recent news, Workday has reported its second-quarter financial results, which slightly exceeded consensus estimates. The company achieved a 16.3% growth in current remaining performance obligations (cRPO), attributed primarily to early renewals. Despite this, several firms have adjusted their price targets for Workday. Goldman Sachs lowered its target to $280, citing a mixed outlook, while maintaining a Buy rating. BMO Capital also reduced its price target to $285, highlighting a cautious outlook but keeping an Outperform rating. Stifel, noting a lack of business momentum acceleration, decreased its price target to $255 and maintained a Hold rating. DA Davidson followed suit, lowering its price target to $225 due to unchanged forward guidance. Needham, however, maintained a Buy rating with a $300 target, acknowledging the modest quarter but focusing on the company’s long-term potential. These developments reflect a varied analyst perspective on Workday’s recent performance and future outlook.

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