Workday Inc (NASDAQ:WDAY) tanked after the company on Thursday reported its fiscal first-quarter results.

The announcement came amid an exciting earnings season. Here are some key analyst takeaways.

KeyBanc Capital Markets On Workday

Analyst Jason Celino reiterated an Overweight rating, while reducing the price target from $335 to $325.

Workday reported 12-month subscription backlog (cRPO) growth of 15.6%, above Street expectations of 15.1%, Celino said in a note. He added, however, that this includes "0.5 points of contribution from ST tenant contracts, which were not previously included in the cRPO definition."

Management's cRPO growth guidance of 15%-16% for the fiscal second quarter also includes this contribution, representing "a slight miss on an apples-to-apples basis," the analyst wrote. He added that the price target is being lowered to reflect "incremental macro uncertainty."

Piper Sandler On Workday

Analyst Brent Bracelin maintained a Neutral rating, while raising the price target from $230 to $255.

Workday delivered a topline beat of $9 million, versus $8 million in the prior four quarters, Bracelin said. Its revenues grew by 13.4% year-on-year, ahead of Piper Sandler's 13.0% estimate, he added.

Subscription revenue came in at $2.059 billion, the analyst stated. "Operating margin came in strong at 30% (vs. 26% last quarter) relative to the 28% guide, partially driven by moderated headcount growth," he further wrote.

Goldman Sachs On Workday

Analyst Kash Rangan reaffirmed a Buy rating, while lifting the price target from $275 to $300.

Workday recorded subscription revenue growth of 13.4% and operating margins of 30.2%, both higher than consensus estimates, Rangan said. The stock came under pressure due to management's lower-than-expected guidance for the fiscal second quarter, of 13.5% subscription revenue growth versus consensus of 13.7%, he added.

The market reaction appears "overblown," given that Workday's revenue growth is back-half weighted, largely driven by already signed deals, while "continued prudence in the face of macro uncertainty makes sense," the analyst wrote.

WestPark Capital On Workday

Analyst Curtis Shauger reiterated a Buy rating, while raising the price target from $315 to $328.

Workday delivered a performance that "demonstrated solid growth and exceptional profitability," Shauger said.

Although the company reported in-line revenues of $2.24 billion, its earnings of $2.23 per share came in significantly ahead of the consensus of $2.01 per share, the analyst stated. The upside was driven by higher-than-expected operating margins, "which we believe reflects the full impact of its recent headcount reductions," he wrote.

Stifel On Workday

Analyst Brad Reback maintained a Hold rating, while cutting the price target from $310 to $275.

Workday's stock plummeted after the results due to cRPO growth coming at the midpoint of management’s guided range and was aided by benefits from short-term tenant contracts "that were not historically included in cRPO," Reback said. "Going forward, these tenant contracts are expected to contribute a full 1pt of uplift to cRPO growth for each of the remaining FY26 quarters," he added.

Investors had expected Workday's core business to record an acceleration in bookings, the analyst stated. "With subscription/bookings growth likely to remain in the mid-to-low-teens area in the coming quarters, even as AI bookings accelerate, we do not expect op-margin upside alone to drive meaningful multiple expansion from current levels," he further wrote.

Check out other analyst stock ratings.

RBC Capital Markets On Workday

Analyst Rishi Jaluria maintained an Outperform rating and price target of $340.

The company reported revenue of $2,240 million, representing 12.6% year-on-year growth, beating consensus of $2,218 million, Jaluria said. "Partner traction continued in Q1, with partners representing more than 20% of net new ACV (up nicely from 15% in Q4)," he wrote.

Workday's non-GAAP earnings came in at $2.23 per share, "nicely above consensus" of $2.01 per share, the analyst stated. He added, however, that the total revenue beat was just by 1.0%, "driven by better-than expected services revenue and a slight beat on subscription revenue."

BofA Securities On Workday

Analyst Brad Sills reaffirmed a Buy rating and price target of $295.

The company, including tenant deals in cRPO, raised questions, Sills said. He added, however, that Workday's transparency is appreciable and that the including is not "a negative, given the recurring nature of these deals."

The company achieved healthy results across geographies and executed well on generating balanced growth, the analyst stated. "The company is on pace to deliver a solid 260 basis points margin expansion this year, driven by the reduction in force and efforts to hire in lower cost geographies," he further wrote.

Citizens On Workday

Analyst Patrick Walravens reiterated a Market Outperform rating and price target of $315.

Workday's first-quarter subscription revenue growth marks a deceleration from 15% in the previous quarter, Walravens said. However, management reiterated their subscription revenue guidance for the second quarter of $2.16 billion, representing 13.5% year-on-year growth, he added.

The company guided to non-GAAP operating margin of around 28.0%, better than consensus of 27.6%, the analyst stated. The full-year subscription revenue of $8.80 billion represents 14% year-on-year growth, he mentioned.

Needham On Workday

Analyst Scott Berg maintained a Buy rating and price target of $300.

The company's cRPO growth reflects new tenants, which was not reflected in the 14.5%-15.5% guidance, Berg said. "AI sales continue to gain momentum and were included in 25% of 1Q expansion deals," he wrote.

Although management's commentary was broadly in-line with expectations, suggesting no material impact of macro uncertainty, the analyst stated. He added, however, that the guidance "reflects continued conservatism on the macro."

Guggenheim Securities On Workday

Analyst John DiFucci reaffirmed a Neutral rating on the stock.

Workday's results reflected "a challenging IT spending environment," DiFucci said. About half the beat on subscription growth was due to a positive currency impact, he added.

This is why the second-quarter guidance came just in-line with expectations and "none of the F1Q beat flowed through to annual guide," the analyst stated.

WDAY Price Action: Shares of Workday had declined by 12.04% to $239.32 at the time of publication on Friday.

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