Workday Reports Q4 Earnings, Price Target Raised by Analysts

Workday's Q4 earnings show a 15% revenue increase, with EPS at $1.92. Despite an 11.8% decline over the past year, analysts have raised price targets, signaling cautious optimism around the stock.

Date: 28-02-2025

AI Rating: 6

Earnings Performance: Workday reported adjusted EPS of $1.92, which surpassed expectations by 8.1%. This is a positive indicator of the company’s earnings ability.

Revenue Growth: The company experienced a year-over-year revenue increase of 15%, totaling $2.21 billion, which is a solid performance and beats estimates by 1.3%.

Free Cash Flow: Free cash flow margin significantly improved to 46.4% from 16.6% in the previous quarter, highlighting effective cash generation capabilities.

Profit Margins: Adjusted operating income was $584 million with a margin of 26.4%. Operating margin remained stable at 3.4%, which is acceptable, though not strongly positive.

Stock Performance: Despite a historical underperformance in the market with an 11.8% decline over the past 52 weeks, the year-to-date (YTD) increase of 5.1% indicates some recovery relative to the broader market.

Future Outlook: Analysts project EPS growth of 107.7% year-over-year for the fiscal year ending January 2026, indicating strong growth expectations going forward.

However, Workday's consensus rating was downgraded to 'Moderate Buy' from 'Strong Buy', which may raise concerns. The current mean price target of $294.36 suggests a modest upside of 8.6%, while the highest analyst target of $350 indicates a potential upside of 29.1%.

Stocks: WDAY