Shares of Workday Inc (WDAY) climbed significantly in early trading on Friday, following the company’s release of upbeat quarterly sales figures on Thursday. This positive performance comes amid a generally exciting earnings season.
Several analysts have shared their positive perspectives on Workday’s performance, highlighting key takeaways from the company’s earnings report.
BofA Securities
analyst Brad Sills maintained a Buy rating on Workday, while also raising the price target from $265 to $310. Sills stated in a note that the second-quarter results represent “a turning point in Workday’s journey toward balanced growth.” He commended the company’s management for raising the fiscal 2027 margin guidance from 25% to 30%, showcasing “the scale possible via leverage from Workday’s extensible applications/development platform and best in class distribution channel to the ERP category.” Sills acknowledged that a “mid-teens topline growth” might not appear remarkable, but it represents a “more achievable durable growth rate” that surpasses the overall ERP industry.Goldman Sachs
analyst Kash Rangan also maintained a Buy rating on Workday and kept the price target at $300. Rangan emphasized that Workday possesses a total addressable market (TAM) exceeding $142 billion, encompassing areas like human capital resources (HCM), financials, analytics, planning, and procurement. He expressed confidence that Workday is positioned to expand into a business exceeding $20 billion, driven by the migration of financial operations to the cloud following the success of its core HCM product. Rangan further noted that management’s guidance suggests operating margin leverage will not hinder growth, enabling Workday to absorb additional expenses. He emphasized that the broad-based nature of operating margin leverage instills confidence in its long-term sustainability.Needham
analyst Scott Berg reiterated a Buy rating and maintained a price target of $350 for Workday. Although Workday exceeded revenue and earnings expectations, Berg acknowledged that the company maintained its full-year subscription guidance due to persistent macroeconomic headwinds. However, he highlighted that Workday is prioritizing profitability, as evidenced by management raising its FY27 operating margin guidance by 500 basis points to over 30%, even while lowering FY25 revenue assumptions by 250 basis points. Berg anticipates that a significant portion of this leverage will stem from sales and marketing, where Workday has invested substantially to launch its new Fins product.As of Friday’s publication, Workday’s shares were up by 10.6% at $255.78.
