Workday (WDAY) Stock Forecast & Price Target

Workday's revenue growth is increasingly driven by its existing customer base, which now accounts for approximately 60% of growth, up from 50% the previous year, highlighting the effectiveness of strong cross-selling strategies. The company has also expanded its total addressable market (TAM) by 18%, growing from $88 billion in 2019 to over $160 billion, reflecting the increasing demand for its comprehensive software solutions. Additionally, in the trailing twelve months ending Q2 2025, Workday experienced notable subscription revenue growth, with human capital management (HCM) revenue increasing 13% to $6 billion and FINS+ revenue rising approximately 20% to $2.2 billion, while operating margins are projected to improve significantly over the next three years.

The analysis indicates a negative outlook for Workday's stock, primarily due to potential pressures on customer retention stemming from competitive positioning and operational challenges. Additionally, the company has revised its near-term subscription revenue growth guidance downward, reflecting a decrease from 15% to approximately 13% for FY27, which raises concerns about future revenue generation. Furthermore, significant risks include underperformance in large enterprise deals and limited traction in international markets, factors that could contribute to an uncertain financial landscape for Workday moving forward.