Workday (WDAY) AI Stock Analysis

• Market Cap: $34.00B
• Dividend Yield: N/A
• Average Volume (3M): 6.17M
• Price to Earnings (P/E): 66.2
• Beta (1Y): 1.04
• Revenue Growth: 13.35%
• EPS Growth: -60.76%
• Country: US
• Employees: 20,482
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 2.47
• Shares Outstanding: 210,000,000
• 10 Day Avg. Volume: 4,890,519
• 30 Day Avg. Volume: 6,170,737
• PEG Ratio: 2.11
• Price to Book (P/B): 5.88
• Price to Sales (P/S): 4.80
• P/FCF Ratio: 16.52
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 3.94
• Enterprise Value/Gross Profit: 5.21
• Enterprise Value/Ebitda: 26.11
• 1Y Price Target: $183.62
• Price Target Upside: 38.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 32
• EPS Forecast (FY): 10.47
• Revenue Forecast (FY): $10.66B

• Rating: 69 Neutral
• Price Target: $148.00 ▲(11.88% Upside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is primarily driven by strengthening financial performance (cash flow strength and improved balance sheet), supported by a generally constructive earnings call centered on AI momentum. These positives are tempered by weak technicals (below key moving averages with negative MACD) and a rich valuation (high P/E with no dividend support).

Positive Factors

Free cash flow generation

Sustained, material free cash flow provides durable financial flexibility: it funds R&D and AI investments, supports share buybacks and debt reduction, and cushions downturns. FCF closely tracking net income (FCF/NI ~0.94) also indicates strong earnings quality and lower reliance on external financing.

Material reduction in leverage

Significantly lower leverage enhances balance-sheet resilience and long-term optionality: more capacity to invest in product and AI, absorb cyclical shocks, and execute buybacks while keeping liquidity. A sizable equity base (~$7.8B) and assets (~$18.1B) support strategic flexibility despite middling ROE history.

Commercial AI momentum and engineering productivity

Organic AI adoption and rapid product-to-GA cadence create a structural growth lever: meaningful early ARR, client adoption of agents (>400 customers) and engineering productivity gains can deepen competitive advantages, accelerate cross-sell, and create recurring consumption revenue (Flex Credits) as usage scales over the medium term.

Negative Factors

Moderating subscription revenue guidance

Management's lower subscription growth target signals a structural step-down in top-line momentum as the company prioritizes AI investment. Slower subscription growth reduces near-term organic expansion and increases reliance on successful monetization of AI features to reaccelerate durable revenue growth over the medium term.

Elongation of large enterprise deal cycles

Prolonged large-deal sales cycles weaken predictability of bookings conversion and can create lumpy revenue recognition. For a subscription/SaaS model, elongated closes slow ARR growth and make smoothing capacity planning, professional services delivery, and revenue forecasting harder across the multi-quarter horizon.

Workforce restructuring and related charges

Restructuring reduces recurring cost base long-term but creates near-term execution and implementation risk: severance, impairments and org change can disrupt customer operations, delay implementations, and pressure professional services revenue and retention if capacity for deployments or support is temporarily impaired.

Workday Business Overview & Revenue Model

Company Description

Workday, Inc. provides enterprise cloud applications in the United States and internationally. The company's applications help its customers to plan, execute, analyze, and extend to other applications and environments, and to manage their business and operations. It offers a suite of financial management applications, which enable chief financial officers to maintain accounting information in the general ledger; manage financial processes; identify real-time financial, operational, and management insights; enhance financial consolidation; reduce time-to-close; promote internal control and auditability; and achieve consistency across finance operations. The company also provides cloud spend management solutions that helps organizations to streamline supplier selection and contracts, manage indirect spend, and build and execute sourcing events, such as requests for proposals; Human Capital Management (HCM) solution, a suite of human capital management applications that allows organizations to manage the entire employee lifecycle from recruitment to retirement, and enables HR teams to hire, onboard, pay, develop, reskill, and provide employee experiences; Workday applications for planning; and applications for analytics and reporting, including augmented analytics to surface insights to the line of business in simple-to-understand stories, machine learning to drive efficiency and automation, and benchmarks to compare performance against other companies. It serves professional and business services, financial services, healthcare, education, government, technology, media, retail, and hospitality industries. The company was formerly known as North Tahoe Power Tools, Inc. and changed its name to Workday, Inc. in July 2005. Workday, Inc. was incorporated in 2005 and is headquartered in Pleasanton, California.

How the Company Makes Money

Workday makes money primarily by selling subscription access to its cloud software. Customers typically sign multi-year contracts and pay recurring fees (often based on factors such as number of employees/users, enabled modules, or scope of deployment) to use Workday applications like HCM, Financial Management, and planning/analytics offerings. A second major revenue stream is professional services, which includes implementation, configuration, training, and advisory support to help customers deploy and adopt the software; these services may be delivered by Workday and/or the company’s ecosystem of systems integrators and consulting partners, with Workday recognizing revenue for the services it delivers directly. Additional earnings can come from ongoing customer support and success offerings that are bundled with or attached to subscriptions, and from expanding existing customers through cross-sells (adding new products/modules) and upsells (expanding usage, geographies, or employee counts), which increases recurring subscription revenue over time. Partner ecosystems (e.g., global consulting/SI firms and technology partners) can contribute to growth by driving implementations and customer adoption, indirectly supporting subscription growth, but partner-specific revenue-share terms are not provided here (null).

Workday Financial Statement Overview

Summary

Fundamentals are improving: strong recent revenue growth and materially higher gross margin, sharply reduced leverage, and robust operating/free cash flow with solid earnings quality. The main offset is still-uneven profitability with modest net margins and year-to-year earnings volatility.

Income Statement

Revenue growth is strong in the latest year (2026 annual: 365% vs. mid-teens growth in prior years), and gross margin improved materially (to ~88% from ~72–76%). Profitability has also stabilized after earlier losses (net income positive in 2024–2026 vs. losses in 2021 and 2023). Offsetting this, net margin remains modest (~7% in 2026 vs. ~19% in 2024) and earnings have been volatile year-to-year, indicating profitability is not yet consistently durable.

Balance Sheet

Leverage has improved significantly, with total debt dropping to ~$0.83B in 2026 from ~$3.30–$3.36B in 2024–2025, driving debt-to-equity down to ~0.11 (from ~0.37–0.58 historically). Equity remains sizable (~$7.8B) against ~$18.1B in assets, supporting balance-sheet resilience. The main watch-out is that returns on equity are positive but not exceptional (~8.9% in 2026) and have been uneven historically (including negative periods).

Cash Flow

Cash generation is a clear strength: operating cash flow rose to ~$2.94B and free cash flow to ~$2.78B in 2026, with free cash flow growth of ~743% year-over-year. Free cash flow closely tracks reported earnings (free cash flow to net income ~0.94 in 2026, ~0.78–0.89 in prior years), suggesting solid earnings quality. A mild concern is that operating cash flow growth has not been smooth historically (including a free cash flow decline in 2023), but the overall trajectory is positive.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	9.55B	8.45B	7.26B	6.22B	5.14B
Gross Profit	7.23B	6.38B	5.49B	4.51B	3.71B
EBITDA	1.36B	1.08B	752.00M	206.00M	377.00M
Net Income	693.00M	526.00M	1.38B	-367.00M	29.00M
Balance Sheet
Total Assets	18.07B	17.98B	16.45B	13.49B	10.50B
Cash, Cash Equivalents and Short-Term Investments	5.44B	8.02B	7.81B	6.12B	3.64B
Total Debt	3.82B	3.36B	3.30B	3.25B	2.10B
Total Liabilities	10.27B	8.94B	8.37B	7.90B	5.96B
Stockholders Equity	7.80B	9.03B	8.08B	5.59B	4.54B
Cash Flow
Free Cash Flow	2.78B	2.19B	1.91B	1.30B	1.38B
Operating Cash Flow	2.94B	2.46B	2.15B	1.66B	1.65B
Investing Cash Flow	333.00M	-1.78B	-1.75B	-2.51B	-1.61B
Financing Cash Flow	-3.32B	-1.15B	-268.00M	1.20B	110.25M

Workday Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 132.29
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WDAY, the sentiment is Negative. The current price of 132.29 is below the 20-day moving average (MA) of 137.95, below the 50-day MA of 161.88, and below the 200-day MA of 213.69, indicating a bearish trend. The MACD of -7.04 indicates Negative momentum. The RSI at 35.25 is Neutral, neither overbought nor oversold. The STOCH value of 12.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WDAY.

Workday Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	71 Outperform	$6.76B	19.61	26.06%	0.94%	9.72%	-2.69%
WDAY	69 Neutral	$34.00B	66.22	7.97%	―	13.35%	-60.76%
DDOG	65 Neutral	$46.31B	438.37	3.24%	―	26.63%	-46.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SNOW	60 Neutral	$59.29B	-48.84	-60.27%	―	28.48%	-19.12%
TEAM	56 Neutral	$19.45B	-250.38	-13.32%	―	19.51%	53.35%
BL	54 Neutral	$2.30B	168.71	6.57%	―	7.36%	-40.62%

Workday Corporate Events

Workday Grants CEO Aneel Bhusri New Equity Package

On February 6, 2026, Workday’s board appointed co‑founder and Executive Chair Aneel Bhusri as chief executive officer, and on March 5, 2026, he received a substantial equity package under the 2022 Equity Incentive Plan tied to his new role. The grant includes a time‑vested restricted stock unit award for 437,602 Class A shares vesting over four years and a performance‑based RSU award for 547,003 shares split into four tranches, which vest only if rising stock price hurdles are met over a five‑year period and Bhusri remains in service, aligning his compensation closely with long‑term shareholder value and company performance.

The most recent analyst rating on (WDAY) stock is a Hold with a $154.00 price target. To see the full list of analyst forecasts on Workday stock, see the WDAY Stock Forecast page.

Workday Reinstates Co-Founder Aneel Bhusri as CEO

On February 6, 2026, Workday’s board appointed co-founder and executive chair Aneel Bhusri as chief executive officer, returning him to the role he previously held for multiple terms since 2009 and keeping him on as chair. The move coincided with the departure of Carl Eschenbach as CEO and director, though he will remain a strategic adviser, and cements Bhusri’s influence alongside co-founder David Duffield, with their stock voting agreement controlling about 68% of Workday’s voting power.

Bhusri’s new compensation package includes a $1.25 million base salary, a target bonus of up to 200% of salary starting in fiscal 2027, and equity awards valued at $135 million in time-based and performance-based RSUs tied in part to stock-price targets over a five-year period. Eschenbach’s separation agreement provides a lump-sum payment of roughly $3.6 million and accelerated vesting of significant equity, as Workday frames the leadership change as a pivot to lead the “AI era” and simultaneously reassures investors by reaffirming that its fiscal 2026 fourth-quarter and full-year results remain in line with prior guidance.

The most recent analyst rating on (WDAY) stock is a Buy with a $275.00 price target. To see the full list of analyst forecasts on Workday stock, see the WDAY Stock Forecast page.

Workday Announces Workforce Restructuring and Related Impairment Charges

On February 4, 2026, Workday detailed plans to trim roughly 2% of its workforce—mainly non-revenue roles in Global Customer Operations—while continuing targeted hiring across strategic, revenue-generating areas, signaling a pivot toward higher-priority initiatives for fiscal 2027. The restructuring will trigger about $135 million in fourth-quarter fiscal 2026 charges, including cash severance and benefits plus significant non-cash impairments tied to office space and long-lived assets, with completion expected by early fiscal 2027 pending local requirements.

The most recent analyst rating on (WDAY) stock is a Hold with a $200.00 price target. To see the full list of analyst forecasts on Workday stock, see the WDAY Stock Forecast page.