Workday (WDAY) PT Lowered to $275 at Stifel

Stifel analyst Brad Reback lowered the price target on Workday (NASDAQ: WDAY) to $275.00 (from $310.00) while maintaining a Hold rating.

The analyst commented, “Workday delivered a typical quarterly beat across revenue and margins, with adj. OM expanding to 30.2% (vs. 28.2% Consensus). However, shares traded down ~7% AH as 15.6% cRPO growth, just in the middle of management's guided range, was aided by ~50bps of benefit from short-term "tenant" contracts (sandbox/test environments) that were not historically included in cRPO but rather just captured in subscription revenue. Going forward, these tenant contracts are expected to contribute a full 1pt of uplift to cRPO growth for each of the remaining FY26 quarters. Clearly investor expectations were centered around the belief the core Workday business would see a bookings acceleration over the course of FY26.So, with subscription/bookings growth likely to remain in the mid-to- low-teens area in the coming quarters, even as AI bookings accelerate, we do not expect op-margin upside alone to drive meaningful multiple expansion from current levels and adjust our target to $275.”

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