TLDR: DA Davidson has raised its price target for Workday (NASDAQ: WDAY) to $250 from $230, maintaining a Neutral rating, following the company’s strong first-quarter fiscal year 2026 results. Workday’s proactive strategy in AI agent management and robust financial performance, including 15% year-over-year revenue growth, are key drivers. However, other analysts like Stifel and Bernstein have offered more cautious outlooks, reflecting mixed market sentiment.
DA Davidson analyst Gil Luria has increased the price target for Workday (NASDAQ: WDAY) stock to $250, up from $230, while reiterating a Neutral rating. This adjustment comes after Workday’s first-quarter fiscal year 2026 results, which met revenue and calculated remaining performance obligations (cRPO) expectations. The company also reported a margin that surpassed forecasts by 220 basis points and reaffirmed its guidance for the fiscal year 2026.
Workday’s financial disclosures indicate robust health, with a gross profit margin of 75.7% and a healthy current ratio of 2.07. The normalized cRPO growth stood at 15%, excluding the impact of Tenant service. The company’s outlook for the second quarter of fiscal year 2026 projects a 14.5% growth in normalized cRPO and a 14% increase in subscription revenue growth for the fiscal year.
A significant factor in DA Davidson’s updated target is Workday’s strategic focus on artificial intelligence. The company is actively positioning itself as a leading system for managing AI agents, expanding beyond its traditional human capital management roots. This initiative is supported by a decision to reinvest a substantial portion of cost savings from a February restructuring into AI opportunities. Workday has already launched several proprietary AI agents and is collaborating with major industry players like Microsoft and Salesforce to manage agents across various vendors.
Workday’s growth has been broad-based, with Manufacturing, Technology, and Media sectors each contributing over $1 billion to the company’s total annual recurring revenue (ARR), bringing the total to five verticals exceeding this milestone. Additionally, the company is seeing increased engagement with federal customers.
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- Workday Unveils Expanded AI Agent Portfolio for HR, Finance, and Industry-Specific Operations
- Workday to Acquire AI Learning Innovator Sana for $1.1 Billion, Bolstering Enterprise AI Capabilities
Despite these positive developments, the market sentiment remains mixed. While Workday exceeded its margin guidance, it only raised its fiscal year 2026 margin outlook by a conservative 50 basis points. Other analyst firms have also adjusted their price targets with varying perspectives. Stifel revised its target to $275, expressing concerns over cRPO and bookings growth. Bernstein reduced its target to $325, maintaining an Outperform rating, and KeyBanc also set its target at $325 with an Overweight rating. Conversely, BNP Paribas Exane reiterated an Outperform rating with a $280 price target, citing optimism for revenue growth driven by new products and AI technologies. Analysts generally acknowledge Workday’s strong business fundamentals but seek further evidence of growth stabilization in the mid-teens.
