Elliott Management Acquires Over $1 Billion Stake in Lululemon and Proposes CEO Candidate
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 18 2025
0mins
Source: CNBC
Elliott Investment Management's Stake: Elliott Investment Management has acquired a stake of over $1 billion in Lululemon Athletica and is proposing former Ralph Lauren CFO Jane Nielsen as a potential CEO candidate.
Leadership Change: Lululemon's CEO Calvin McDonald will step down on January 31 following a year of poor performance, prompting the board to seek a new leader with the help of an executive search firm.
Market Challenges: The company is facing increased competition in the athleisure market from brands like Vuori and Alo Yoga, which has raised concerns about its performance.
Elliott's Broader Investments: In addition to Lululemon, Elliott has also invested in other companies this year, including significant stakes in Workday and PepsiCo.
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Analyst Views on WDAY
Wall Street analysts forecast WDAY stock price to rise
31 Analyst Rating
22 Buy
9 Hold
0 Sell
Moderate Buy
Current: 124.020
Low
235.00
Averages
275.19
High
325.00
Current: 124.020
Low
235.00
Averages
275.19
High
325.00
About WDAY
Workday, Inc. is an enterprise artificial intelligence (AI) platform for managing people, money, and agents. The Company provides organizations with cloud solutions powered by artificial intelligence (AI) to solve business challenges, including supporting and empowering the workforce, managing finances and spending. It offers a suite of cloud-based enterprise solutions that address the needs of the C-suite on a platform designed to be open, extensible, and configurable, allowing integration with other applications and the ability for customers and partners to build custom applications. It offers Workday Build, which is an open developer platform that provides customers and partners with the ability to create and share AI-powered solutions. It serves financial services, government, healthcare, higher education, hospitality, manufacturing, professional and business services, retail, technology and media, and transportation.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Financial Performance: The company reported a 13.5% year-over-year increase in total revenue to $2.54 billion in Q1, with subscription revenue rising over 14% to $2.35 billion, and adjusted earnings per share (EPS) climbing 19% to $2.66, exceeding market expectations and indicating business resilience.
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- Data Source Integration: This technology integrates data from various systems, such as CRM and HR, into a unified planning environment, eliminating the need for fragmented spreadsheets, thereby reducing data governance risks and improving data sharing convenience, ensuring transparency and consistency in decision-making.
- Real-Time Audit Trail: Each scenario includes an audit trail that records the data sources and assumptions used, ensuring traceability in the decision-making process, which not only enhances compliance but also increases management's trust in the decisions made.
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- Data Integration Capability: This feature combines actual data from Adaptive Planning with operational data from various enterprise systems, enabling finance leaders to quickly identify the root causes of performance issues, optimizing resource allocation and improving outcomes.
- Real-Time Decision Support: By providing clear explanations and recommended actions, Adaptive Decision Intelligence helps teams make validated decisions before meetings conclude, ensuring leadership has sufficient information to make informed choices at critical moments.
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See More
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- Growth Deceleration: Over the past 7-8 years, Workday's revenue growth has significantly slowed, leading analysts to shift focus from 'franchise quality' to 're-acceleration visibility', with guidance indicating a normalized lower-growth trajectory for its SaaS business.
- Strategic Necessity of AI: Liani highlights that artificial intelligence has become a strategic necessity for Workday, albeit accompanied by economic uncertainty; however, the company's deep entrenchment in HCM, payroll, and core employee data mitigates outright displacement risks.
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- AI Product Growth: The annual account value (AAV) from Workday's AI-based products surged 200% year-over-year, nearing $500 million in annual recurring revenue, indicating widespread adoption of AI technology among customers and enhancing the company's competitive position.
- Rising Subscription Revenue: Subscription revenue grew over 14% year-over-year to $2.35 billion, with a 15.5% increase in the 12-month subscription revenue backlog to $8.81 billion, reflecting strong customer demand and sustainability of future revenues.
- Optimistic Outlook: The company forecasts a 13% growth in Q2 subscription revenue to about $2.455 billion, maintaining its full-year subscription revenue outlook between $9.925 billion and $9.95 billion, showcasing management's confidence in future performance.
See More
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- Significant AI Growth: Workday's first-quarter annual account value (AAV) from agentic AI products surged 200% year-over-year, nearing $500 million in annual recurring revenue, showcasing the company's strong growth potential in AI despite a challenging hiring environment.
- Strong Financial Performance: The company reported a 13.5% year-over-year increase in total revenue to $2.54 billion in Q1, with subscription revenue rising over 14% to $2.35 billion, and adjusted earnings per share (EPS) climbing 19% to $2.66, exceeding market expectations and indicating business resilience.
- Optimistic Future Outlook: Workday forecasts a 13% growth in Q2 subscription revenue to about $2.455 billion, slightly above the $2.45 billion consensus, while maintaining its full-year subscription revenue outlook between $9.925 billion and $9.95 billion, reflecting ongoing growth confidence.
- Attractive Market Valuation: Despite a significant drop in stock price prior to the report, Workday's forward price-to-sales (P/S) ratio stands at only 3.1 and forward price-to-earnings (P/E) ratio at 12.3, combined with its investments in AI, positioning it as a solid rebound candidate that may attract investor interest.
See More
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- Oil Price Plunge: Oil prices dropped over 5% on Wednesday after Secretary of State Marco Rubio indicated that Washington was giving Iran talks 'every chance to succeed,' reflecting market sensitivity to diplomatic efforts and potentially impacting energy sector profitability.
- Escalation of Military Actions: New U.S. airstrikes in Iran targeted a military site deemed a threat to U.S. forces and commercial maritime traffic, adding uncertainty to the ongoing diplomatic negotiations and prompting investors to reassess risk levels in the market.
- Strong Tech Stock Performance: Shares of cloud-based AI and data platform company Snowflake surged 36% following a strong earnings report and a $6 billion investment plan in Amazon Web Services, showcasing investment enthusiasm and market confidence in the tech sector amid rising AI demand.
- Inflation Data Focus: Investors are closely watching the upcoming April inflation reading, which is expected to influence the Fed's future rate decisions, as Minneapolis Fed President Neel Kashkari emphasized that lowering inflation remains a top priority, indicating market sensitivity to economic policy.
See More
Workday Launches Adaptive Decision Intelligence for Faster Financial Planning
- Enhanced Decision Efficiency: Workday's Adaptive Decision Intelligence allows finance teams to ask questions and model scenarios in minutes using natural language, significantly reducing the time from data extraction to decision-making, thus enabling businesses to respond quickly to market changes.
- Data Source Integration: This technology integrates data from various systems, such as CRM and HR, into a unified planning environment, eliminating the need for fragmented spreadsheets, thereby reducing data governance risks and improving data sharing convenience, ensuring transparency and consistency in decision-making.
- Real-Time Audit Trail: Each scenario includes an audit trail that records the data sources and assumptions used, ensuring traceability in the decision-making process, which not only enhances compliance but also increases management's trust in the decisions made.
- Early Adopter Program: Adaptive Decision Intelligence is currently available to early adopters and is expected to be more broadly released later this year, indicating Workday's commitment to enhancing clients' financial planning capabilities through innovative technology.
See More
Workday Launches Adaptive Decision Intelligence for Enhanced Financial Planning
- Efficiency Boost: Workday's Adaptive Decision Intelligence allows finance teams to ask questions and model scenarios in minutes, significantly reducing the data processing time from days to minutes, thereby enhancing decision-making efficiency and responsiveness.
- Data Integration Capability: This feature combines actual data from Adaptive Planning with operational data from various enterprise systems, enabling finance leaders to quickly identify the root causes of performance issues, optimizing resource allocation and improving outcomes.
- Real-Time Decision Support: By providing clear explanations and recommended actions, Adaptive Decision Intelligence helps teams make validated decisions before meetings conclude, ensuring leadership has sufficient information to make informed choices at critical moments.
- Audit Trail Functionality: Each scenario includes an audit trail that ensures transparency and traceability in the decision-making process, thereby enhancing the credibility and compliance of decisions while reducing risks associated with data fragmentation.
See More
Bank of America Resumes Neutral Rating on Workday
- Rating Resumption: Bank of America has resumed coverage of Workday with a Neutral rating and a $140 price target, as analyst Tal Liani notes that while Workday is a mission-critical system with a strong installed base, revenue growth has decelerated from approximately 30% to mid-to-low teens, with projections of 10-12% growth over the next three years.
- Growth Deceleration: Over the past 7-8 years, Workday's revenue growth has significantly slowed, leading analysts to shift focus from 'franchise quality' to 're-acceleration visibility', with guidance indicating a normalized lower-growth trajectory for its SaaS business.
- Strategic Necessity of AI: Liani highlights that artificial intelligence has become a strategic necessity for Workday, albeit accompanied by economic uncertainty; however, the company's deep entrenchment in HCM, payroll, and core employee data mitigates outright displacement risks.
- Value Compression Risks: Analysts warn of value compression risks as seat-based monetization faces pressures from headcount rationalization, potential contract pricing and duration pressures, and a gradual shift towards agent-based pricing, noting that while Workday's responses through Illuminate and Sana are strategically sound, monetization remains in its infancy and may take time to offset pressures on the traditional seat model.
See More
Workday Reports Strong Earnings, Stock Rallies
- Strong Financial Performance: Workday's Q1 total revenue increased by 13.5% year-over-year to $2.54 billion, surpassing market expectations of $2.52 billion, demonstrating the company's resilience in a challenging hiring environment.
- AI Product Growth: The annual account value (AAV) from Workday's AI-based products surged 200% year-over-year, nearing $500 million in annual recurring revenue, indicating widespread adoption of AI technology among customers and enhancing the company's competitive position.
- Rising Subscription Revenue: Subscription revenue grew over 14% year-over-year to $2.35 billion, with a 15.5% increase in the 12-month subscription revenue backlog to $8.81 billion, reflecting strong customer demand and sustainability of future revenues.
- Optimistic Outlook: The company forecasts a 13% growth in Q2 subscription revenue to about $2.455 billion, maintaining its full-year subscription revenue outlook between $9.925 billion and $9.95 billion, showcasing management's confidence in future performance.
See More
