Fiserv earnings missed by $0.61, revenue fell short of estimates
Investing.com - BofA Securities has reiterated its Buy rating and $265.00 price target on Workday (NASDAQ:WDAY), currently trading at $219.01, following the company’s analyst day at its Workday Rising user conference. According to InvestingPro data, Workday’s stock shows potential upside from current levels, with the company maintaining strong financial health metrics.
BofA highlighted Workday’s acquisition of Sana for $1.1 billion and a new partnership with Microsoft to import agents built on Azure AI Foundry into the Illuminate agent platform. The company also launched a new flex credit pricing model for Illuminate, which should enable Workday to capture upside from agent usage through a consumption model. With a market capitalization of $58.5B and robust free cash flow of $2.4B, Workday shows strong financial capacity for strategic investments.
The firm views Workday’s updated growth and margin targets positively for three key reasons: the company set a more achievable growth target of 12% to 15% (down from mid-teens), demonstrated better operating leverage with a 35% FY28 margin target (up from 30%+ in FY27), and showed increased discipline on stock-based compensation (13%-14% of revenue in FY28, down from 15%). InvestingPro analysis reveals the company is currently achieving revenue growth of ~14% with a strong gross profit margin of 76%, suggesting these targets are well-aligned with current performance.
BofA expects these changes to result in accelerating and higher quality free cash flow, with the firm modeling a two-year compound annual growth rate of 23% in FY28, up from 20% in FY27.
The firm maintained its $265 price objective on Workday stock based on these developments and the company’s strategic positioning in the enterprise software market.
In other recent news, Workday’s latest earnings report has drawn positive attention, with TD Cowen reiterating its Buy rating and setting a price target of $310.00. The firm described the earnings as a "Clean Print," highlighting a return to historical contracted remaining performance obligation levels. Meanwhile, KeyBanc has maintained its Overweight rating with a $285.00 price target, following Workday’s Financial Analyst Day, where the company outlined a financial framework targeting a 12-15% subscription revenue growth rate by fiscal year 2028. JMP Securities also reiterated its Market Outperform rating, setting a higher target of $315.00, emphasizing the significant attendance at the company’s recent events. Piper Sandler upgraded its rating from Underweight to Neutral, raising its price target to $235.00, citing Workday’s increased focus on artificial intelligence initiatives. Needham maintained its Buy rating with a $300.00 target but noted the possibility of a reduced fiscal year 2027 subscription revenue growth target. These developments reflect a mix of optimism and caution among analysts regarding Workday’s future performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.