RBC Capital has reduced its price target on Workday Inc. to $180 from $220, while keeping an Outperform rating on the stock. The shares are trading at $125.71, close to a 52-week low of $125.83, and are down roughly 49% versus a year ago.
The firm weighed Workday’s most recent quarter, which produced modest beats, against management’s fiscal 2027 outlook, which landed below consensus. Total revenue came in about 0.4% above analyst estimates, a shortfall relative to the firm’s four-quarter average beat of 0.8%. Subscription revenue exceeded consensus by 0.2%, again underperforming the recent four-quarter average beat of 0.4%.
Current remaining performance obligations, a metric often watched for future subscription revenue visibility, were 0.2% above consensus expectations. On margins, the company reported a non-GAAP operating margin that beat consensus by roughly 200 basis points.
Despite those beats in the quarter, Workday’s guidance for the first quarter of fiscal 2027 and for the full fiscal year 2027 for both revenue and profitability was below consensus expectations. RBC noted those weaker guidance figures but said it still sees attractive risk-reward, pointing to early signs of artificial intelligence traction as a constructive development for the company.
Other broker actions followed the release of the fiscal 2027 outlook, reflecting a range of views among analysts:
- Piper Sandler lowered its price target to $135 from $200 and kept a Neutral rating. The firm pointed to Workday’s subscription revenue growth guidance of 12.5% year-over-year for fiscal 2027, which is below a prior internal estimate of 13%.
- KeyBanc cut its target to $155 from $260, citing concerns about the company’s growth and margin guidance.
- Bernstein SocGen reduced its target to $214 from $298, stating that while the quarter was in line with expectations, the fiscal 2027 guidance came in slightly below consensus.
- Cantor Fitzgerald reiterated an Overweight rating with a $200 price target, expressing optimism about Workday’s position in the artificial intelligence adoption curve.
- Bank of America Securities maintained a Buy rating and a $265 price target after Workday reported fourth-quarter cRPO growth of 15.8%, which beat guidance by 30 basis points. That cRPO growth was attributed in part to deals in the government and healthcare sectors being pushed into fiscal 2027.
These moves illustrate divergent analyst assessments following the company’s guidance: some firms trimmed expectations and targets, while others emphasized potential upside related to AI adoption or the company’s order book dynamics.
Given the mix of modest quarterly beats, margin outperformance on a non-GAAP basis, and guidance that fell short of consensus, the market response has been notable, leaving shares near their 52-week low and prompting broad reassessments by the sell-side.
For market participants monitoring enterprise software and areas tied to corporate IT spending, the combination of subscription growth trajectories, deferred deal timing in government and healthcare, and early AI traction will likely be focal points as analysts refine their models and price targets.