Workday (NASDAQ:WDAY) Shares Gap Down Following Analyst Downgrade

Workday, Inc. (NASDAQ:WDAY)’s share price gapped down prior to trading on Wednesday after Wells Fargo & Company lowered their price target on the stock from $255.00 to $180.00. The stock had previously closed at $130.23, but opened at $119.56. Wells Fargo & Company currently has an overweight rating on the stock. Workday shares last traded at $125.9660, with a volume of 5,849,970 shares changing hands.

Several other brokerages have also recently issued reports on WDAY. Evercore cut Workday from an “outperform” rating to an “in-line” rating and set a $160.00 price objective for the company. in a report on Wednesday. The Goldman Sachs Group initiated coverage on Workday in a research note on Monday, January 12th. They set a “neutral” rating and a $238.00 price target for the company. Rosenblatt Securities decreased their price objective on shares of Workday from $180.00 to $150.00 and set a “buy” rating on the stock in a research report on Wednesday. Oppenheimer lowered their price objective on shares of Workday from $270.00 to $200.00 and set an “outperform” rating on the stock in a research note on Tuesday, February 17th. Finally, DA Davidson reduced their price target on shares of Workday from $260.00 to $250.00 and set a “hold” rating on the stock in a report on Wednesday, November 26th. One research analyst has rated the stock with a Strong Buy rating, nineteen have issued a Buy rating and sixteen have given a Hold rating to the stock. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average price target of $226.28.

Insiders Place Their Bets

In other Workday news, insider Robert Enslin sold 22,185 shares of the business’s stock in a transaction on Monday, January 5th. The stock was sold at an average price of $210.17, for a total value of $4,662,621.45. Following the completion of the transaction, the insider directly owned 106,330 shares in the company, valued at approximately $22,347,376.10. The trade was a 17.26% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, insider Gerrit S. Kazmaier sold 6,547 shares of the firm’s stock in a transaction on Friday, December 19th. The stock was sold at an average price of $218.77, for a total value of $1,432,287.19. Following the sale, the insider owned 111,353 shares in the company, valued at $24,360,695.81. This trade represents a 5.55% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders have sold 370,321 shares of company stock valued at $78,866,401. 20.00% of the stock is currently owned by insiders.

Key Stories Impacting Workday

Here are the key news stories impacting Workday this week:

• Positive Sentiment: Q4 results beat expectations: revenue and non‑GAAP EPS topped estimates, subscription revenue grew ~15.7% YoY and margins improved, showing operating leverage that supports longer‑term profitability. Workday Q4 results press release
• Positive Sentiment: Management emphasizes AI as a growth catalyst and is increasing AI investments — supporting the company’s long‑term TAM and product differentiation despite near‑term cost pressure. CEO emphasizes AI growth opportunity
• Positive Sentiment: Some analysts remain bullish: Needham reaffirmed a Buy with a $300 target and other shops still rate WDAY as an outperform opportunity, providing counter‑balance to downgrades. Analyst notes (Benzinga)
• Neutral Sentiment: Broad market context — Nasdaq futures and a positive pre‑open market helped stabilize software names today, which may be supporting a bounce in WDAY despite company‑specific headwinds. Market futures ahead of open
• Negative Sentiment: Weak FY27 subscription revenue guidance: Workday forecast subscription growth below Street estimates (guidance ~12–13%), signaling slower new client wins as customers moderate tech spend — the primary driver of the post‑earnings selloff. Reuters: forecasts below estimates
• Negative Sentiment: AI disruption fears and margin/cost concerns: Investors are worried that AI both threatens parts of the software model and forces heavy near‑term investment; commentary and headlines point to the “cost of competing in AI” denting near‑term margins. MarketWatch: cost of competing in AI
• Negative Sentiment: Leadership change and uncertainty: Co‑founder Aneel Bhusri is returning as CEO, adding transition risk that some investors see as a near‑term overhang on execution and sentiment. Yahoo: founder returns as CEO
• Negative Sentiment: Analyst cuts and downgrades: Several firms trimmed price targets or downgraded ratings after the cautious outlook (multiple reports summarize cuts and rating changes), which amplifies selling pressure and headline risk. Benzinga: analysts slash forecasts

Institutional Trading of Workday

Hedge funds have recently added to or reduced their stakes in the business. AlphaQuest LLC lifted its stake in shares of Workday by 636.7% in the 2nd quarter. AlphaQuest LLC now owns 1,886 shares of the software maker’s stock valued at $453,000 after purchasing an additional 1,630 shares in the last quarter. PKO Investment Management Joint Stock Co purchased a new position in Workday in the third quarter valued at approximately $1,805,000. Phoenix Financial Ltd. acquired a new position in Workday during the third quarter valued at approximately $2,000,000. Rakuten Investment Management Inc. acquired a new position in Workday during the third quarter valued at approximately $124,718,000. Finally, Norges Bank purchased a new stake in Workday during the second quarter worth approximately $442,702,000. 89.81% of the stock is owned by institutional investors and hedge funds.

Workday Stock Down 2.0%

The firm’s 50-day moving average price is $184.46 and its 200-day moving average price is $213.51. The company has a market cap of $33.56 billion, a price-to-earnings ratio of 53.32, a price-to-earnings-growth ratio of 1.11 and a beta of 1.13. The company has a debt-to-equity ratio of 0.34, a current ratio of 1.83 and a quick ratio of 1.83.

Workday (NASDAQ:WDAY) last posted its earnings results on Tuesday, February 24th. The software maker reported $2.47 earnings per share for the quarter, beating the consensus estimate of $2.32 by $0.15. Workday had a net margin of 6.95% and a return on equity of 10.50%. The business had revenue of $2.53 billion for the quarter, compared to analyst estimates of $2.52 billion. During the same quarter in the previous year, the business posted $1.92 EPS. The business’s quarterly revenue was up 14.5% on a year-over-year basis. Sell-side analysts forecast that Workday, Inc. will post 2.63 earnings per share for the current fiscal year.

Workday Company Profile

Workday, Inc (NASDAQ: WDAY) is a provider of cloud-based enterprise applications focused on human capital management (HCM) and financial management. Founded in 2005 by Dave Duffield and Aneel Bhusri following their tenure at PeopleSoft, the company develops software-as-a-service solutions that help organizations manage workforce and financial processes in a unified, cloud-native environment. Workday’s platform emphasizes continuous updates, data security, and a configurable architecture aimed at large and mid-sized enterprises.

The company’s product portfolio centers on Workday Human Capital Management and Workday Financial Management, with additional offerings for payroll, talent management, workforce planning and analytics.