JMP Reaffirms Market Outperform Rating on Workday After Mixed Q1 Report

JMP analysts gave Workday Inc. (NASDAQ:WDAY) a Market Outperform rating on May 23, along with a stable price target of $315. The endorsement follows the enterprise software provider’s first-quarter earnings announcement, which exceeded Wall Street’s forecasts.

In FQ1 2026, Workday’s non-GAAP earnings per share of $2.23 were higher than the $2.01 consensus estimate. The company’s revenue also increased 13% year-over-year to $2.24 billion, just above the projected $2.22 billion. Despite a solid earnings report, Workday’s growth slowed down from the previous quarter, with its year-over-year revenue increase falling from 15% to 13%. A key indicator of the company’s business strategy, subscription revenue, also slowed, increasing only 13% to $2.06 billion, compared to the 16% in the preceding quarter.

Workday’s quarterly billings, which came to $1.57 billion, up 6% from the prior year but below the $1.68 billion consensus estimate, raised some alarm. Compared to the 16% growth observed in the previous quarter, this slower billing growth rate proved to be a significant decline. After these conflicting results were announced, the WDAY fell 7% on May 23 aftermarket trading, despite having gained 6% year-to-date.

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