Workday’s (WDAY) shares jumped by more than 7% in Friday’s pre-market session despite Wall Street analysts reacting to its first-quarter 2027 earnings beat with a mix of price target raises and cuts.
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Workday Exceeds Expectations in Q1
During the quarter, which ended on April 30, the Pleasanton, California-based company grew its total subscription revenue backlog by 11% year-over-year to approximately $27.3 billion.
Its quarterly revenue also jumped by 14% from a year ago to $2.54 billion, while its earnings per share climbed by 19% year-over-year to $2.66.
Why Wall Street Is Split on Workday Stock
Reacting to the results, Piper Sandler analyst Billy Fitzsimmons maintained his Hold rating on WDAY stock but lifted his price target from $135 to $145, suggesting about 19% upside ahead. Fitzsimmons noted that Workday’s revenue growth benefits from closing deals expected to be finalized during the fourth quarter but instead closed in the first.
The analyst noted that it is notable that Workday was able to surpass earnings estimates and double down on its AI monetization efforts at a time other software companies are worried about AI disruption and are facing pressure from more cautious spending by customers.
Similarly, Wells Fargo analyst Michael Turrin reaffirmed his Buy rating on WDAY and raised his price target from $180 to $185, predicting about 52% upside. Turrin noted that Workday achieved a difficult balance in delivering solid earnings while still upholding its previous full-year earnings forecast. He added that the company’s annualized operating margin now looks more achievable
However, Needham’s Scott Berg is not completely confident. He reaffirmed his Buy rating on WDAY stock but slashed his price target by 67%, from $300 to $180, indicating about 48% upside.
Berg sees the Q1 2027 results as a decent earnings beat compared to consensus estimates on revenue and operating income. However, the analyst believes the after-hours surge on Thursday is more likely an indication of investors relief, as expectations had been set very low.
Is WDAY a Good Stock to Buy Now?
On Wall Street, Workday’s shares remain a Moderate Buy based on analysts’ consensus rating. This breaks down to 19 Buys and 12 Holds issued by 31 analysts over the past three months.
However, the average WDAY price target of $179.25 implies about 47% upside from current trading levels.
