Workday (WDAY) Stock Forecast & Price Target

Workday has demonstrated robust subscription revenue growth of 14.5% year-over-year, while strategically transitioning professional services to partner firms, which positions the company well for future expansion. The significant long-term financial trajectory is marked by total revenue growth from $1.57 billion to $8.45 billion and a remarkable increase in free cash flow from $228 million to $2.19 billion under ASC 606, accompanied by improved operating margins. Additionally, with raised operating cash flow guidance for FY26 and ongoing share repurchase programs, Workday is well-prepared to sustain and potentially accelerate growth in a recovering IT spending environment.

Workday has experienced a notable slowdown in its growth, raising concerns about the sustainability of its revenue streams, especially in light of potential further deceleration. The emergence of generative AI poses a risk to its business model, as it may lead to commoditization of its services and alter how value is monetized unfavorably for the company. Additionally, the company faces downside risks from underperformance in large enterprise deals and challenges in international markets, which could negatively impact future revenue and profitability expectations.