Workday stock is pulling back after one of its sharpest rallies in years. Two Wall Street firms hit the brakes on Monday, downgrading the stock after a 76% run-up from its recent low.
Deutsche Bank cut its rating to Hold from Buy, while raising its price target to $220 from $180. BTIG moved to Neutral from Buy, pulling its previous $175 price target entirely.
Workday fell 2.9% to $192.95 in premarket trading on Monday. That came after a 3.8% drop on Friday.
The stock had surged nearly 18% last Thursday after Reuters reported that private-equity firm Silver Lake had been in discussions with Workday about a potential take-private deal.
That spike pushed WDAY up 24% for the month of August alone. But despite that run, the stock is still down 7.5% in 2026 and off 14% over the past 12 months.
BTIG analyst Allan Verkhovski said the downgrade was not just about valuation. He pointed to consensus fiscal 2027 subscription revenue growth expectations as a key concern, calling them “too optimistic.”
Verkhovski had initiated his Buy rating in December, believing Workday was set to accelerate AI adoption with “minimal AI disruption risk.” He now says a private-market environment may actually be better for that transition.
Deutsche Bank echoed the valuation point. WDAY appreciated roughly 26% from June 1 through August 14, while peers like ServiceNow, Salesforce, Autodesk, Adobe, and Intuit fell about 4% on average over the same stretch.
The bank still views Workday as one of the highest-quality franchises in enterprise software, with a 76% gross profit margin, mission-critical products, and strong customer retention. The downgrade is not about weakening fundamentals.
BTIG’s Verkhovski noted Workday remains a “logical private-equity target,” supported by a 97% gross retention rate and strong revenue visibility.
He laid out the math clearly: if talks with Silver Lake break down and the stock reverts to around $175, the risk-reward is now balanced at current levels. But if a deal gets done, there is upside from a $50 billion-plus transaction.
Evercore ISI analyst Kirk Materne wrote Friday that Silver Lake’s interest suggests the “terminal AI risk” attached to enterprise software may be overdone.
Materne added that a Workday deal could support more bullish sentiment around ServiceNow and Salesforce, both of which fell over 2.5% on Monday.
BMO Capital kept its Outperform rating. UBS raised its price target to $220 but held its Neutral rating. Morgan Stanley went the other direction, downgrading to Underweight with a $145 target. CLSA initiated with an Underperform rating and a $92 target.
The RSI on WDAY currently sits in overbought territory, according to InvestingPro data.
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