Cantor Fitzgerald reiterates Workday stock rating after job cuts

Cantor Fitzgerald maintained a positive stance on Workday's stock, retaining an Overweight rating and maintaining a $205.00 price target after the company disclosed workforce reductions. The reduction aims to streamline operations, with a particular focus on the product and technology team, resulting in a 2.5% decrease in workforce. Additionally, Workday is downsizing leased office space locations, though the company anticipates continued hiring in strategic areas throughout fiscal year 2027.

Analysts have been impressed by Workday's recent financial performance, with 30 upgrading their earnings forecasts for the upcoming period. This positive sentiment aligns with the company's strong second-quarter fiscal 2027 results, which saw total revenue and subscription revenue surpass expectations. Workday's adjusted operating margin and earnings per share also significantly exceeded forecasts, thanks to disciplined cost management and AI-driven automation.

Despite this optimism, some analysts remain cautious. Freedom Broker downgraded Workday from a Buy to Hold, citing valuation concerns while raising the price target to $200 from $180. DA Davidson increased its price target to $190 from $135, while KeyBanc raised its target to $215 from $158. Cantor Fitzgerald itself lowered its price target to $205 from $220, maintaining an Overweight rating, reflecting the company's outlook and recent earnings beats.

The stock's valuation remains a point of divergence among analysts. While some view Workday as undervalued based on its Fair Value analysis, others highlight weaker guidance for the second half of fiscal year 2027. Nonetheless, the consensus among the 30 upgrading their earnings forecasts suggests confidence in the company's long-term growth prospects.