DA Davidson increased its price target on Workday to $190 from $135 while maintaining a Neutral rating, citing the company’s artificial intelligence momentum and stronger-than-expected second-quarter results.
Workday’s shares were trading at $201.56 at the time of the update, already above the new target. The stock has gained 45% over the past six months, supported by a 13% revenue increase to $10.15 billion in the latest period. Gross profit margin stood at 76%, while operating margin reached 31.1%, exceeding consensus estimates of 30%.
Total and subscription revenue exceeded expectations by approximately 0.5%, though DA Davidson noted that fiscal 2027 guidance implies a weaker second half. Initial commentary for fiscal 2028 indicated stronger-than-anticipated subscription revenue growth and profitability.
Workday’s AI products now represent more than 25% of new annual contract value, according to Stifel. DA Davidson acknowledged early signs of momentum in AI monetization but indicated it would remain cautious given the deceleration outlook.
Other analysts adjusted targets following the results. Cantor Fitzgerald reduced its target to $205 from $220, while KeyBanc raised its target to $215 and maintained an above-average rating. Bernstein SocGen Group increased its target to $238, and Stifel lifted its target to $160.
InvestingPro assessed Workday’s financial health as "GOOD" and flagged the shares as undervalued at current levels.
