HomeFinance NewsWorkday Stock Dives as New Management Slashes Revenue Outlook

Workday Stock Dives as New Management Slashes Revenue Outlook

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Workday, a software maker, experienced a significant drop in its stock price as it lowered its outlook for subscription revenue growth through fiscal 2027. The company now expects subscription revenue growth of 17% to 19% in the next three fiscal years, down from its previous target of 20%. The news of the lowered outlook caused WDAY stock to plummet more than 8%.

Despite the disappointing growth forecast, analysts remain hopeful about Workday’s management team and their strategic moves. The company recently appointed a new chief financial officer, Zane Rowe, and is set to have a sole CEO in early 2024. While the lowered margin targets are not being celebrated, analysts believe that the company’s new go-to-market initiatives, especially internationally, require time and investment to yield results. The new CFO is known for his preference for conservatism and optionality in decision-making.

During the analyst day, Workday highlighted the opportunities it sees in artificial intelligence and international expansion. The company’s software offerings focus on human capital management and financial software. Before the drop in stock price, WDAY had seen a significant gain of nearly 38% in 2023. However, the stock’s technical ratings indicate a bearish signal as it dipped below its 50-day moving average.

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