Workday Inc reported a 12.6% increase in Q3 subscription revenue, reaching $2.43 billion, slightly above expectations. However, the company issued lower guidance for operating margins, forecasting at least 28.5% for Q4, below analyst consensus of 28.7%. This has raised concerns among investors regarding future profitability.
Despite the revenue growth, shares dropped nearly 7% in after-hours trading following the earnings report. The company also announced plans to acquire AI startup Sana for $1.1 billion, aiming to enhance its competitive position in the cloud software market.
The broader market saw gains with the Nasdaq-100 up 0.59% and the S&P 500 up 0.39%, but Workday's stock movement reflects specific investor concerns about its growth trajectory and margin outlook.
Wall Street analysts forecast WDAY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for WDAY is 275.19 USD with a low forecast of 235.00 USD and a high forecast of 325.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
31 Analyst Rating
Wall Street analysts forecast WDAY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for WDAY is 275.19 USD with a low forecast of 235.00 USD and a high forecast of 325.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
22 Buy
9 Hold
0 Sell
Moderate Buy
Current: 188.580
Low
235.00
Averages
275.19
High
325.00
Current: 188.580
Low
235.00
Averages
275.19
High
325.00
RBC Capital
Outperform
to
NULL
downgrade
$320 -> $300
2026-01-05
Reason
RBC Capital
Price Target
$320 -> $300
AI Analysis
2026-01-05
downgrade
Outperform
to
NULL
Reason
RBC Capital lowered the firm's price target on Workday to $300 from $320 and keeps an Outperform rating on the shares. 2026 is likely to be a year when AI tailwinds become more evident for companies well positioned for enterprise AI adoption, while less prepared peers may remain pressured by the "AI is the death of software" narrative, the analyst tells investors in a research note. Enterprise spending appears to be stabilizing and improving in select areas, with GenAI driving innovation even as management teams remain conservative in early 2026 guidance, the firm says.
BTIG
initiated
$285
2025-12-16
Reason
BTIG
Price Target
$285
2025-12-16
initiated
Reason
BTIG initiated coverage of Workday with a Buy rating and $285 price target.
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BTIG
Buy
initiated
$285
2025-12-16
Reason
BTIG
Price Target
$285
2025-12-16
initiated
Buy
Reason
BTIG assumed coverage of Workday with a Buy rating and $285 price target. The shares have traded flat over the last two years despite the company growing annual subscription revenue 16% and free cash flow b 18%. the analyst tells investors in a research note. BTIG sees next year's estimates as "de-risked."
Rosenblatt
Neutral
initiated
$235
2025-12-02
Reason
Rosenblatt
Price Target
$235
2025-12-02
initiated
Neutral
Reason
Rosenblatt initiated coverage of Workday with a Neutral rating and $235 price target. The firm believes the company will continue to see solid growth in its core U.S. human capital management business while driving margins higher. Workday's growth path likely to continue to decelerate, but offset by the increasing earnings power, the analyst tells investors in a research note. Rosenblatt seeks a better entry point into the name.
About WDAY
Workday, Inc. is a provider of an artificial intelligence (AI) platform to help organizations manage their people, money, and agents. The Company provides over 11,000 organizations with cloud solutions powered by AI to help solve business challenges, including supporting and empowering their workforce, managing their finances and spending in an ever-changing environment, and planning for the unexpected. It offers Financial Management, Spend Management, Human Capital Management (HCM), Planning, and Analytics applications. The Company sells its solutions worldwide primarily through direct sales. It also offers professional services, both directly and through its Workday Services Partners, to help customers deploy its solutions. It offers businesses flexible solutions to help them adapt to their industry-specific needs and respond to change. It serves various industries, including professional and business services, financial services, healthcare, education, government, and others.
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.
