Top Wall Street Forecasters Revamp Workday Price Expectations Ahead Of Q4 Earnings

As Workday, Inc. (WDAY) prepares to release its fourth-quarter financial results on Tuesday, February 25, 2025, top Wall Street analysts have been revising their price targets and ratings, reflecting a mix of optimism and caution. The company, based in Pleasanton, California, is expected to report quarterly earnings of $1.78 per share, up from $1.57 per share in the year-ago period, and quarterly revenue of $2.18 billion, compared to $1.92 billion a year earlier.



Analysts' revised price targets and ratings provide valuable insights into the market's sentiment towards Workday's strategic shift towards AI and workforce reduction. Loop Capital analyst Yun Kim maintained a Hold rating but raised the price target from $242 to $260 on February 19, 2025, suggesting a more cautious stance on the stock's immediate performance but potential long-term prospects. Morgan Stanley analyst Keith Weiss downgraded the stock from Overweight to Equal-Weight and cut the price target from $330 to $275, indicating a more neutral stance and concerns about the workforce reduction's impact on short-term performance. Needham analyst Scott Berg reiterated a Buy rating with a price target of $300, while Goldman Sachs analyst Kash Rangan maintained a Buy rating and increased the price target from $300 to $310, both reflecting optimism about Workday's AI focus. Citigroup analyst Steven Enders maintained a Neutral rating and cut the price target from $287 to $270, suggesting a more cautious approach.



Investors should focus on key financial metrics and trends when evaluating Workday's Q4 earnings report, including earnings per share (EPS), revenue, subscription services revenue, professional services revenue, subscription revenue backlog, revenue growth, and EPS growth. Analysts expect Workday to report EPS of $1.78 per share, representing an increase of 11.5% year-over-year, and revenue of $2.18 billion, indicating a year-over-year increase of 13.4%. The revenue breakdown is expected to show subscription services revenue of $2.02 billion, with a year-over-year change of +15.1%, and professional services revenue of $154.84 million, with a year-over-year change of -4.4%. The subscription revenue backlog is forecasted to be $24.87 billion, compared to $20.90 billion in the year-ago period.



The varying accuracy rates of analysts influence the credibility of their price targets and ratings for Workday stock. Analysts with higher accuracy rates, such as Yun Kim (80%) and Keith Weiss (76%), tend to have more reliable recommendations, while those with lower accuracy rates, like Scott Berg (62%) and Kash Rangan (66%), may have less credible recommendations. Investors should consider the accuracy rates of analysts when evaluating their price targets and ratings for Workday stock.

In conclusion, top Wall Street analysts have been revising their price targets and ratings for Workday ahead of its Q4 earnings report, reflecting a mix of optimism and caution about the company's strategic shift towards AI and workforce reduction. Investors should focus on key financial metrics and trends when evaluating the earnings report and consider the varying accuracy rates of analysts when assessing their recommendations. As Workday continues to navigate its strategic transformation, investors will be watching closely to see if the company meets or exceeds analysts' expectations.