Workday Stock Soars As Analysts Call Q2 A 'Turning Point'

Shares of Workday Inc WDAY climbed in early trading on Friday, after the company reported upbeat quarterly sales on Thursday.

The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.

BofA Securities On Workday

Analyst Brad Sills reiterated a Buy rating, while raising the price target from $265 to $310.

The second-quarter results represent "a turning point in Workday’s journey toward balanced growth, in our view," Sills said in a note. Management raised the fiscal 2027 margin guidance from 25% to 30%, demonstrating "the scale possible via leverage from Workday’s extensible applications/development platform and best in class distribution channel to the ERP category," he added.

"Mid-teens topline growth does not sound exiting, though it is a more achievable durable growth rate and one that is still outpacing the general ERP industry," the analyst further wrote.

Check out other analyst stock ratings.

Goldman Sachs On Workday

Analyst Kash Rangan maintained a Buy rating and price target of $300.

The company has a TAM (total addressable market) of over $142 billion, "spanning human capital resources (HCM), financials, analytics, planning, and procurement," Rangan said. "We believe Workday is poised to grow into a $20bn+ business catalyzed by financials moving to the cloud following its core HCM marquee product," he added.

Management's guidance suggests that operating margin leverage will "not come at the expense of growth and Workday will be able to absorb incremental expenses," the analyst wrote. Operating margin leverage being broad-based gives confidence in its long-term sustainability, he further stated.

Needham On Workday

Analyst Scott Berg reaffirmed a Buy rating and price target of $350.

Although Workday delivered a revenue and earnings beat, it maintained the full-year subscription guidance due to continuing macro headwinds, Berg said.

"Workday is shifting focus to profitability, with mgmt raising its FY27 OM guidance by 500bps to 30%+ even as FY25 revenue assumptions are lowered 250bps," the analyst wrote. "We expect an outsized proportion of leverage to come from S&M, where Workday has invested significantly to roll out their new Fins product," he added.

WDAY Price Action: Shares of Workday were up 10.6% to $255.78 at the time of publication on Friday.

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