Workday Plunges on Disappointing Analyst Day Updates

Workday (WDAY:US) shares dropped about 10% following the company's announcement of its annual subscription revenue growth forecast. 

Workday anticipates subscription revenue growth in the range of 17% to 19% over the next three years. This forecast fell slightly below the expectation that Workday would reaffirm its previous target of achieving subscription growth exceeding 20%.

Following these updates, Bank of America (BAC:US) analysts have adjusted their outlook for Workday by lowering the price target to $260 from $275 while maintaining a Buy rating. 

They acknowledged the company's lower guidance but also emphasized that in the current challenging macroeconomic environment, there is a reasonable level of conservatism built into these expectations.

Citigroup (C:US) analysts, who also lowered the price target, added:

"While the outlook is disappointing, we expect a portion is driven by macro and conservatism of a new team resetting expectations," the analysts commented. "Mgmt gave a well-received 12mo cRPO metric ($5.9B, +21% y/y in F2Q, +1pt.“

Representatives Ro Khanna and Josh Gottheimer traded the stock in recent months.

Workday shares are still up over 36% year-to-date.