Rosenblatt raised its rating on Workday to Buy from Neutral and set a $180.00 price target, signaling roughly a 25% upside from the prevailing share price of $144.42. The upgrade, announced on Monday, rests in part on the stock's recent underperformance and what the firm views as an attractive valuation.
The research note highlights that Workday's shares have dropped about 36% since early December. InvestingPro figures cited in the note show a 36.12% decline over the last six months, leaving the stock trading near its 52-week low. Rosenblatt flagged that the company is trading at under 10 times free cash flow, a metric it used to justify the more bullish stance.
Rosenblatt also pointed to the return of Aneel Bhusri to the CEO role as a constructive development. The firm said its field checks indicate Workday's core business remains stable. That assessment is consistent with the company's trailing-twelve-month revenue of $9.23 billion and a gross profit margin of 75.64%, figures Rosenblatt cited as evidence of durable fundamentals.
On the question of artificial intelligence, Rosenblatt expressed limited concern that generative AI will erode Workday's position as the system of record for sensitive business functions. The research team therefore treated AI as a manageable factor rather than an immediate competitive threat to those core systems.
Workday is scheduled to announce fiscal fourth-quarter 2026 results on Feb. 24. Rosenblatt expects the company to deliver results in line with expectations for the quarter and anticipates that management will either reiterate or modestly raise guidance for fiscal 2027 when it reports.
Leadership developments have added to the market discussion around Workday. The company named co-founder Aneel Bhusri as CEO, replacing Carl Eschenbach, who stepped down effective immediately. Bhusri has signaled a strategic emphasis on artificial intelligence as part of his return.
Analyst responses to the leadership change have been mixed. Stifel reduced its price target to $175 and kept a Hold rating. By contrast, Oppenheimer maintained an Outperform rating and a $270 price target. Evercore ISI set a $200 target, noting concerns about Workday's growth path and a scarcity of quarters that have delivered a material beat-and-raise pattern.
According to the company's announced transition plan, Bhusri will continue in his role as Chair of the Board while guiding Workday's AI strategy, and Eschenbach will remain with the company as a strategic advisor to support the transition. These organizational moves come as Workday prepares for an upcoming earnings call that investors will scrutinize for further clarity on performance and strategy.
Investors and market participants will be watching the Feb. 24 earnings report to see whether the company's results and any commentary on fiscal 2027 align with Rosenblatt's expectation of in-line quarterly results and potential guidance reaffirmation or modest uplift.