Key Takeaways
- Workday’s first-quarter results arrive Thursday after market close; Wall Street projects $2.52 earnings per share and $2.52 billion in revenue
- Shares have plummeted approximately 40% in 2025 and declined 55.6% across the trailing twelve months, currently trading near $126.61
- Cantor Fitzgerald reduced its target price from $200 to $160, referencing subdued channel feedback and tempered expectations
- Key focal points include subscription growth dynamics, competitive pressure from AI capital allocation, and performance of the Flex Credits consumption model
- Eagle Capital Management maintains a bullish stance, highlighting margin expansion potential and the strategic value of the founder’s CEO return
Workday (WDAY) delivers its fiscal first-quarter financial results Thursday evening, with investor sentiment at remarkably depressed levels.
Shares settled at $126.61 on May 20, representing a roughly 40% decline since January and a devastating 55%-plus drop over the past year. The dramatic selloff marks a stunning reversal for what was previously viewed as a cornerstone enterprise software investment.
The Street anticipates earnings per share of $2.52 alongside revenue of $2.52 billion — reflecting year-over-year expansion of 13% and 12.5% respectively. Top-line estimates hover just beneath the $2.53 billion the company delivered in the preceding quarter.
EPS forecasts have experienced modest upward revisions during the past two months, though the adjustments remain marginal. Analyst conviction appears notably absent as Thursday’s announcement approaches.
The consensus rating remains at Buy, with an average price objective of $178.16 — suggesting approximately 41% appreciation potential from present levels. However, recent analyst activity paints a more reserved picture.
Earlier this week, Cantor Fitzgerald lowered its target from $200 to $160. While maintaining its Overweight stance, the firm cited muted expectations and underwhelming channel intelligence.
At the current valuation, WDAY commands merely 12.3 times projected fiscal 2027 earnings — representing a substantial markdown relative to the wider software industry.
Critical Metrics for Thursday’s Release
Three primary factors will shape market reaction following the print. Initially: subscription revenue momentum and backlog performance. With Workday already serving 65% of Fortune 500 organizations, opportunities for significant new enterprise client acquisitions appear constrained.
Additionally, market participants are questioning whether artificial intelligence expenditures are diverting capital from conventional HCM and financial management solutions. Cantor Fitzgerald specifically highlighted this concern — indicating certain enterprises are reallocating resources toward AI projects rather than established enterprise applications like Workday.
Finally, analysts seek tangible validation that the recently introduced “Flex Credits” consumption-based revenue structure can compensate for potential weakness in traditional seat-based licensing.
Workday has deployed approximately $3 billion toward AI-focused acquisitions and positions its Illuminate platform as its agentic AI offering. Yet this strategic pivot introduces near-term revenue visibility challenges, and the market currently lacks patience for execution uncertainty.
During the previous quarter, Workday exceeded revenue expectations and achieved a record 30.6% operating margin. Those achievements provided minimal stock support — cautious full-year projections drove shares lower as market participants concentrated on decelerating expansion.
Institutional Investors Identify Opportunity
Eagle Capital Management featured WDAY in its first-quarter 2026 shareholder communication, contending the market applies excessive generalization across the entire software landscape.
Eagle emphasizes that Workday currently operates substantially below normalized profitability levels, creating meaningful margin expansion runway. The firm also views the founder’s return to the chief executive position as a meaningful catalyst for accelerated innovation.
Eagle’s overarching thesis: software sector recovery will prove far more selective than the indiscriminate selloff. While certain companies face legitimate AI-driven disruption threats — others, they contend, will demonstrate resilience or even capture opportunities.
Seventy hedge fund portfolios maintained WDAY positions at year-end 2024, increasing from 64 funds the previous quarter. This upward trend indicates select institutional capital continues identifying value at compressed valuation levels.
Workday’s market capitalization currently stands at approximately $30.47 billion. Thursday’s earnings call and forward commentary will reveal whether the narrative is finding stability or confronting continued headwinds.
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