Workday’s reduced growth outlook appropriately reflects macro, says RBC Capital

RBC Capital analyst Rishi Jaluria keeps an Outperform rating and $275 price target on Workday after the company’s Analyst Day event and amended midterm target model for subscription growth to high-teens from 20%. The analyst notes that the change appropriately factors in ongoing macro and likely bakes in conservatism around growth initiatives. The firm notes however that the incremental data points were mostly positive, including the long-awaited 12-month backlog disclosure, constructive partner checks, and Generative AI updates. The analyst contends that the 20%+ growth rate “remains in play” and recommends that investors buy Workday on the pullback.