Workday (WDAY)
NASDAQ:WDAY
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Workday
(NASDAQ:WDAY)
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Rating:67Neutral
Price Target:
$157.00
▲(26.79% Upside)
Action:Downgraded
Date:05/22/26
WDAY scores solidly on strengthening financial performance (profitability recovery and standout free-cash-flow generation) and a constructive earnings outlook (raised margin guidance, strong backlog/retention, and AI-driven expansion indicators). These positives are tempered by weak technicals (price below key moving averages with negative MACD) and a premium valuation (P/E ~35) that leaves less room for execution missteps, especially as revenue growth has decelerated.
Positive Factors
High-quality subscription backlog & retention
Large, recurring subscription backlog (CRPO $8.81B) and 97% gross retention provide multi-year revenue visibility and durable renewal economics. High retention reduces churn risk, supports predictable cash flows, and underpins a steady upsell runway that bolsters long-term revenue stability.
Negative Factors
Decelerating revenue growth & expansion reliance
Growth slowed to ~13% and management notes heavy dependence on expansions (~60% of subscription growth). Long-term top-line momentum therefore hinges on sustained penetration within customers and continued upsell efficacy; any weakening in expansion dynamics or new-logo acquisition could materially slow revenue growth.
Read all positive and negative factors
Positive Factors
Negative Factors
High-quality subscription backlog & retention
Large, recurring subscription backlog (CRPO $8.81B) and 97% gross retention provide multi-year revenue visibility and durable renewal economics. High retention reduces churn risk, supports predictable cash flows, and underpins a steady upsell runway that bolsters long-term revenue stability.
Read all positive factors
Workday Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue from various business segments, revealing which areas drive growth and where the company might focus future expansion efforts.
Breaks down revenue from various business segments, revealing which areas drive growth and where the company might focus future expansion efforts.
Data provided by:
The Fly
The FlyWorkday (WDAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$32.24B
Dividend YieldN/A
Average Volume (3M)5.32M
Price to Earnings (P/E)39.2
Beta (1Y)1.01
Revenue Growth13.70%
EPS Growth76.27%
CountryUS
Employees20,482
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)3.22
Shares Outstanding201,000,000
10 Day Avg. Volume5,634,769
30 Day Avg. Volume5,324,247
Financial Highlights & Ratios
PEG Ratio2.11
Price to Book (P/B)5.88
Price to Sales (P/S)4.80
P/FCF Ratio16.52
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue4.22
Enterprise Value/Gross Profit5.56
Enterprise Value/Ebitda24.81
Forecast
1Y Price Target
$169.55Price Target Upside36.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering26
EPS Forecast (FY)10.71
Revenue Forecast (FY)$10.67B
Workday Business Overview & Revenue Model
Company Description
Workday, Inc. delivers comprehensive, cloud-hosted enterprise software solutions to clients worldwide. These platforms empower organizations to strategize, operate, examine performance, integrate with existing systems, and oversee their overall bu...
How the Company Makes Money
Workday makes money primarily through recurring subscription revenue from customers that license access to its cloud applications. Customers typically pay subscription fees (often structured as multi-year agreements) based on factors such as the n...
Workday Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Aug 20, 2026
Earnings Call Sentiment Positive
The call highlighted strong financial results (double-digit subscription and total revenue growth), healthy backlog and retention, substantial operating and cash flow improvement, and pronounced AI momentum (big YoY growth in agentic ACV, usage metrics, and product rollouts). Key positives include raised margin guidance, active share repurchases, significant platform and international progress, and early signs that AI drives larger expansion deals. Lowlights were largely execution- and timing-related: AI monetization remains early, RPO mix/timing effects, a meaningful GAAP/non-GAAP margin gap, and the operational challenge of scaling provisioning and delivery to meet rising AI demand. Overall, the positives materially outweigh the caveats, but continued execution on AI adoption and monetization is required.Positive Updates
Strong Top-Line Revenue Growth
Subscription revenue of $2.354B, up 14% year-over-year; total revenue $2.542B, up 13%.
Negative Updates
AI Monetization Still Early
Company repeatedly emphasized AI adoption is early stage and monetization via flex credits and agent consumption is just ramping — continued execution and adoption required to convert momentum into substantial recurring revenue.
Read all updates
Q1-2027 Updates
Positive
Negative
Strong Top-Line Revenue Growth
Subscription revenue of $2.354B, up 14% year-over-year; total revenue $2.542B, up 13%.
Read all positive updates
Company Guidance
Workday reiterated fiscal 2027 guidance, forecasting subscription revenue of $9.925–$9.95 billion (growth of ~12–13%) and Q2 FY27 subscription revenue of about $2.455 billion (≈13% growth), with CRPO expected to rise 13.5–14.5% in Q2 and Q2 professional services revenue of ~$180 million; they raised FY27 non‑GAAP operating margin guidance to 30.5% (Q2 ~30%), said Q2 GAAP operating margin is ~19 percentage points lower than non‑GAAP and full‑year GAAP ~18–19 points lower, set a FY27 non‑GAAP tax rate of 19%, maintained operating cash flow guidance of $3.45 billion, forecast capital expenditures of ~$270 million, and expect free cash flow of ~$3.18 billion (≈15% growth).Workday Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
68
Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.85B | 9.55B | 8.45B | 7.26B | 6.22B | 5.14B |
| Gross Profit | 7.47B | 7.23B | 6.38B | 5.49B | 4.51B | 3.71B |
| EBITDA | 1.67B | 1.36B | 1.08B | 752.00M | 206.00M | 377.00M |
| Net Income | 847.00M | 693.00M | 526.00M | 1.38B | -367.00M | 29.00M |
Balance Sheet | ||||||
| Total Assets | 16.09B | 18.07B | 17.98B | 16.45B | 13.49B | 10.50B |
| Cash, Cash Equivalents and Short-Term Investments | 4.35B | 5.44B | 8.02B | 7.81B | 6.12B | 3.64B |
| Total Debt | 3.81B | 3.82B | 3.36B | 3.30B | 3.25B | 2.10B |
| Total Liabilities | 9.41B | 10.27B | 8.94B | 8.37B | 7.90B | 5.96B |
| Stockholders Equity | 6.68B | 7.80B | 9.03B | 8.08B | 5.59B | 4.54B |
Cash Flow | ||||||
| Free Cash Flow | 2.97B | 2.78B | 2.19B | 1.91B | 1.30B | 1.38B |
| Operating Cash Flow | 3.18B | 2.94B | 2.46B | 2.15B | 1.66B | 1.65B |
| Investing Cash Flow | 953.00M | 333.00M | -1.78B | -1.75B | -2.51B | -1.61B |
| Financing Cash Flow | -4.55B | -3.32B | -1.15B | -268.00M | 1.20B | 110.25M |
Workday Technical Analysis
Negative
123.83
Price Trends
127.99
Positive
137.94
Negative
181.76
Negative
Market Momentum
2.77
Positive
46.66
Neutral
13.74
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 123.83 is below the 20-day moving average (MA) of 135.63, below the 50-day MA of 127.99, and below the 200-day MA of 181.76, indicating a neutral trend. The MACD of 2.77 indicates Positive momentum. The RSI at 46.66 is Neutral, neither overbought nor oversold. The STOCH value of 13.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WDAY.
Workday Risk Analysis
Workday disclosed 38 risk factors in its most recent earnings report. Workday reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Workday Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $83.38B | 598.62 | 3.78% | ― | 29.54% | -21.11% | |
74 Outperform | $6.30B | 14.63 | 31.03% | 0.94% | 9.37% | 23.47% | |
67 Neutral | $32.24B | 39.21 | 10.41% | ― | 13.70% | 76.27% | |
62 Neutral | $22.64B | -106.55 | -16.70% | ― | 24.74% | 49.81% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $83.32B | -67.16 | -57.21% | ― | 31.07% | 16.46% | |
60 Neutral | $1.64B | 64.23 | 7.70% | ― | 8.12% | -82.54% |
* Technology Sector Average
WDAY
Workday
130.80
-114.85
-46.75%
PAYC
Paycom
134.52
-110.26
-45.04%
TEAM
Atlassian
88.52
-111.80
-55.81%
BL
BlackLine
28.73
-26.60
-48.08%
DDOG
Datadog
229.90
107.97
88.55%
SNOW
Snowflake
232.78
23.66
11.31%
Workday Corporate Events
Business Operations and StrategyExecutive/Board Changes
Workday Updates Executive Severance and Bonus Protection Policy
Neutral
Apr 24, 2026
On April 20, 2026, Workday, Inc. amended and restated its Executive Severance and Change in Control Policy to enhance benefits for executives experiencing a qualifying termination outside a change in control context. The company shortened the excl...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.