Workday reported a flawless second quarter for fiscal 2027, beating estimates, yet Freedom Broker downgraded the stock from Buy to Hold with a price target of $200, up from $180. The company posted total revenues of $2.649 billion, up 12.8% year-over-year, with subscription revenues rising nearly 14% to $2.471 billion. Operating income grew to $313 million from $248 million, and AI annual recurring revenue approached $600 million. Management also announced a new $4.0 billion share repurchase authorization. Despite the strong quarter, the analyst cited concerns over limited near-term revenue acceleration, a deceleration in subscription revenue growth to about 11% in the second half of fiscal 2027 and fiscal 2028, and valuation already reflecting margin gains. The downgrade reflects that much of the upside is priced in, not a weak quarter.
Workday IncStrong Q2 beat and $4B buyback, but analyst downgrade to Hold on valuation and decelerating growth
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