TD Cowen has reduced its target price on Workday Inc. (NASDAQ: WDAY) to $200 from $280 while maintaining a Buy rating as the company approaches its fiscal fourth-quarter earnings report scheduled for February 24. The firm’s note underscores a set of mixed checks from the field: some encouraging signs tied to product momentum and the monetization prospects of recent acquisitions, and softer signals from IT spending surveys that indicate a slight year-over-year decline in priority for Workday and HCM expenditures.
Workday’s shares have been under pressure. The stock was trading at $142.72, close to its 52-week low of $139.38, and has fallen about 38% over the past six months. At current levels, InvestingPro analysis referenced by the brokerage places shares below the platform’s calculated Fair Value and lists the stock among candidates considered most undervalued by that metric.
TD Cowen’s modelling for the quarter assumes subscription revenue growth of 15.5% and a 16% rise in contracted remaining performance obligations, or cRPO, for the fourth quarter. For fiscal 2027, the firm expects subscription revenue growth to align with the company’s guidance of approximately 13%.
On the product and monetization front, checks on AI-related opportunities tied to acquired companies such as HiredScore, Evisort, and Paradox remain constructive. The note also singled out Sana as an asset that should build on that AI momentum. Despite those pockets of optimism, TD Cowen observed little change in the underlying core trends of the business.
Leadership developments have added a layer of uncertainty. Carl Eschenbach has stepped down as CEO after three years, a move the firm described as optically disruptive and potentially reflective of internal unrest amid recent workforce reductions. The company executed a roughly 2% reduction in force in early February. TD Cowen flagged the return of co-founder Aneel Bhusri as CEO as a positive medium-term factor, particularly with respect to advancing AI initiatives at the core of the product suite.
Valuation metrics cited in the note show that the stock trades at about 11 times EV/CY26E free cash flow under TD Cowen’s calculations. The $200 price target corresponds to roughly 16 times EV/CY26E free cash flow, a level that supports the firm’s maintained Buy rating given its view of the company’s AI opportunities and long-term growth trajectory.
Outside of TD Cowen’s assessment, other broker actions have reflected differing views in response to the leadership change and business checks. Citizens downgraded Workday shares from Market Outperform to Market Perform, citing the CEO transition and the results of its checks. BMO Capital cut its price target to $204 from $285 while retaining an Outperform rating and pointing to sector uncertainties in application software and the management change. Rosenblatt issued an upgrade to Buy from Neutral with a $180 target, attributing its decision to the stock’s current valuation and the return of Bhusri as CEO. Stifel trimmed its price target to $175 from $235 and kept a Hold rating in place following the CEO change.
Collectively, these analyst moves illustrate divergent interpretations of Workday’s near-term dynamics and longer-term prospects. While acquisitions and AI-focused tools are viewed as potential growth levers, near-term metrics and leadership shifts have prompted some firms to reassess risk and valuation. Investors will have an opportunity to compare those external checks with the company’s own results and guidance when Workday reports later this month.