Workday Price Target Cut to $190 After Softer 2027 Guidance Sparks 8.3% Slump
Baird cut Workday’s price target to $190 from $195 after management lowered its 2027 sales guidance in Q4, triggering an 8.3% stock drop to a five-year low. Shares are down about 40% YTD as investor concerns grow over AI competition and delayed large deals in government and healthcare.
1. Baird Lowers Price Target
On February 25, Baird cut its Workday price target to $190 from $195 and maintained an Outperform rating after the company issued reduced 2027 sales guidance in its Q4 report.
2. Shares Plunge to Five-Year Low
Shares dropped 8.3% in early trading to a five-year low and have declined about 40% year to date, making Workday one of the weakest U.S. software stocks this year.
3. AI Adoption Concerns
Investors have questioned Workday’s competitiveness as AI tools from firms like Anthropic, Google and OpenAI advance, prompting CEO Aneel Bhusri to highlight the company's ongoing AI investments and client usage.
4. Delayed Large Deals
Several large contracts in government and healthcare sectors are taking longer to close, extending sales cycles and contributing to the softer forecast for 2027.