Piper Sandler reduced its price target on Workday Inc. (NASDAQ: WDAY) to $135 from $200 on Wednesday, but left its rating at Neutral. The firm’s move follows Workday’s formal fiscal 2027 guidance, which the analyst team said landed below preliminary remarks given during the company’s third-quarter call.
The shares are trading at $119.61, which the broker noted is close to the company’s 52-week low of $125.83, after a difficult year that saw the stock fall nearly 49%.
Workday’s guidance for subscription revenue growth in fiscal 2027 was set at 12.5% year-over-year, down from the prior internal estimate of 13%. For the first quarter of fiscal 2027, the company guided to subscription revenue growth of 13.4%, below an earlier 14% figure. Over the last twelve months the business delivered 13.1% revenue growth.
Company management said the downward revision reflects longer sales cycles and some modest deal push-outs during the fourth quarter of fiscal 2026. Despite the guidance cut, Workday’s fourth-quarter fiscal 2026 results came in slightly ahead of consensus expectations.
On profitability, fiscal 2027 operating margin guidance points to more moderate margin expansion as Workday steps up investments in artificial intelligence. Management emphasized confidence in a second-half fiscal 2027 acceleration driven by AI monetization.
Piper Sandler analyst Billy Fitzsimmons summarized the firm’s view on valuation, saying that risk and reward look balanced at roughly 15 times calendar year 2027 enterprise value to free cash flow excluding stock-based compensation.
Other research houses have adjusted their views in recent days following the fiscal 2027 guidance. KeyBanc reduced its price target to $155, citing concerns tied to fiscal 2027 growth and margin guidance. Bernstein SocGen lowered its target to $214, noting that while the quarter was essentially in line, fiscal 2027 guidance arrived slightly below consensus.
Not all firms moved lower: Cantor Fitzgerald left an Overweight rating in place with a $200 price target, pointing to potential upside tied to enterprise adoption of AI over coming quarters. BofA Securities reiterated a Buy rating and maintained a $265 price target after the fourth-quarter results. Rosenblatt trimmed its price target to $150 but retained a Buy rating despite the guidance shortfall.
These adjustments illustrate a range of analyst perspectives on Workday’s near-term trajectory amid its current financial disclosures and strategic decision to accelerate AI spending.
Context and key numbers
- Piper Sandler price target: lowered to $135 from $200; rating retained at Neutral.
- Current share price cited: $119.61; 52-week low cited: $125.83; shares down nearly 49% over the past year.
- Fiscal 2027 subscription revenue guidance: 12.5% year-over-year (prior estimate 13%).
- First-quarter fiscal 2027 subscription revenue guidance: 13.4% (prior 14%).
- Reported revenue growth over the last twelve months: 13.1%.
Analyst reactions summarized
- KeyBanc: price target cut to $155, citing concerns on fiscal 2027 growth and margins.
- Bernstein SocGen: price target cut to $214, noting guidance slightly below consensus despite an in-line quarter.
- Cantor Fitzgerald: maintained Overweight and $200 target, optimistic on AI adoption in large enterprises.
- BofA Securities: reiterated Buy, $265 price target.
- Rosenblatt: lowered target to $150, maintained Buy despite guidance shortfall.
What management says
Workday’s leadership attributed the guidance revision to elongated sales cycles and modestly delayed deals in the fourth quarter of fiscal 2026. The company also signaled it will prioritize AI investments, accepting slower near-term margin improvement with an expectation that AI monetization will drive a second-half fiscal 2027 revenue and margin ramp.
Bottom line
Piper Sandler’s reduction in the price target reflects the bank’s assessment of the updated fiscal 2027 revenue outlook and the company’s decision to accelerate AI spending, while several other brokers have either lowered targets or retained optimistic stances, resulting in a spectrum of analyst recommendations.