Workday (WDAY) Stock Forecast & Price Target

Workday is expected to experience strong growth in the coming years as it raises its FY27 guidance above expectations, accelerates AI investments and is expected to achieve a CAGR of 11.5% in total revenues to reach $10,650-$10,660 million. The company is also expected to see an increase in subscription revenue by 12.6%, reaching $9,940-$9,950 million, with a strong operating margin of ~31%. Workday has a stable financial position and is committed to investing in new technologies like AI, which have already contributed to over 25% of new bookings. Additionally, the company's aggressive share buyback program and expanding customer base are positive indicators of its continued success.

Workday is experiencing slower growth in subscription cRPO and has only modestly beat Street numbers, creating skepticism around the sustainability of their growth rate. The company's lately sluggish financial performance, including lower than expected subscription revenue and a weaker FY28 forecast, highlights concerns about their ability to generate significant profit and monetize their products effectively. As a result, it is likely that the stock will take a breather and potentially see a decrease in price following these results.