Shares of Workday Inc (NASDAQ:WDAY) dipped on Friday, trading at around $219.30 — down 3.64% — at last check Friday despite a strong fiscal second-quarter report.
Here are some key analyst takeaways.
- BofA Securities analyst Brad Sills maintained a Buy rating, while reducing the price target from $278 to $265.
- KeyBanc Capital Markets analyst Jason Celino reaffirmed an Overweight rating, while slashing the price target from $325 to $285.
- Canaccord Genuity analyst David Hynes maintained a Buy rating, while reducing the price target from $330 to $275.
- RBC Capital Markets analyst Rishi Jaluria reiterated an Outperform rating and price target of $340.
- Guggenheim Securities analyst John DiFucci maintained a Neutral rating on the stock.
Check out other analyst stock ratings.
BofA Securities: Workday reported "solid" second-quarter results, with operating margin expanding by 400 basis points year-on-year to 29%. The company's healthy revenue growth underlined the "strength of the Workday platform," Sills said in a note.
Growth was driven by both Workday's existing base and net new ACV (annual contract value), with AI-driven ACV doubling year-on-year, the analyst added. However, the fourth-quarter guidance raised concerns around the inorganic revenue contribution from the Paradox acquisition.
KeyBanc Capital Markets: Workday reported cRPO (current remaining performance obligations) growth of 16.4%, beating Street expectations of 15.6%, Celino said. Higher-than-expected early renewals drove the results, he added.
The company's subscription revenue grew by 14% year-on-year to $2,169 million, surpassing consensus of $2,161 million, while pro services revenue of $179 million was in-line with expectations, the analyst stated. Although Workday modestly raised its fiscal 2026 subscription revenue guidance by $15 million to $8,815 million, "the majority of the raise stems from its Paradox acquisition, implying the organic subscription outlook is maintained, despite the F2Q outperformance," he further wrote.
Canaccord Genuity: Workday made some "notable announcements," Hynes said. These include:
- AI momentum in the business, with AI-driven ACV again doubled year-over-year
- Entry into several new markets, including India
- Entry into new partnerships, including with leader in earned wage access DailyPay
- New subsidiary called Workday Government to capture the large Federal opportunity
- Decision to acquire Paradox for $1.0 billion in cash
RBC Capital Markets: Workday's total revenues rose 12.6% year-on-year to $2,348 million, beating consensus of $2,342 million, Jaluria said. Non-GAAP earnings came in at $2.21 per share, meaningfully higher than consensus of $2.11 per share.
"cRPO topped street estimates for the third consecutive quarter, showing signs of stabilization," the analyst wrote. Stripping out contributions from the Paradox acquisition, management's full-year guidance has not changed, he further stated.
Guggenheim Securities: Workday's fiscal third-quarter guidance for subscription revenue came at $2.235 billion, falling slightly short of expectations, DiFucci said. The full-year guidance is based "entirely" on the newly announced acquisition of Paradox, which management expects to close in the fiscal third quarter, he added.
The full-year guidance reflects a slowdown in the back half of the year, as there is no flow-through of the second quarter beat, the analyst stated. This raises investor concern over the company's organic growth over the next two quarters, he commented.
Price Action: Shares of Workday had declined by 4.09% to $218.28 at the time of publication on Friday.
Read More:
Image: Shutterstock
