PLEASANTON, California, August 14, 2026, 10:22 EDT — U.S. cash markets were trading as scheduled.
- Workday dropped 4.3% on Friday, retracing some of Thursday’s 17.8% jump that was spurred by takeover speculation.
- A premium of 20% over Friday’s closing price suggests an equity value of about $59.5 billion.
- The stock is currently priced 12.9% higher than the mean analyst price target.
Shares of Workday Inc. NASDAQ:WDAY dropped 4.3% to $197.58 in early trading on Friday, after delivering their strongest session in ten years. Despite the decline, the stock remained 12.7% higher than before the report.
The drop highlights the main limitation of the agreement. A standard 20% premium would now imply a $59.5 billion equity buyout, surpassing Silver Lake’s approximately $55 billion Electronic Arts deal.
Silver Lake has been in acquisition discussions with Workday, Reuters said on Thursday. The talks are ongoing, according to sources, with no certainty of a finalized deal. Silver Lake could also seek more investors to help fund the transaction.
| Workday price marker | Share price | Equity value | Change |
|---|---|---|---|
| Prior to Reuters report | About $175.25 | About $43.3 billion | Baseline |
| Thursday’s market close | $206.45 | About $51.1 billion | +17.8% |
| Friday 09:54 EDT | $197.58 | $49.62 billion | -4.3% Friday |
The market value climbed by approximately $7.8 billion at Thursday’s close, with about $1.5 billion of that increase lost on Friday. The majority of the takeover premium thus remained in place for buyers.
| Sample premium | Indicated share price | Total equity value | Estimated enterprise value |
|---|---|---|---|
| 10% | $217.34 | $54.58 billion | $53.23 billion |
| 20% | $237.10 | $59.54 billion | $58.19 billion |
| 30% | $256.85 | $64.51 billion | $63.15 billion |
The financial arithmetic is challenging. As of April, Workday held $4.353 billion in cash and marketable securities. Total debt principal stood at $3.0 billion, resulting in a limited net cash offset for the company.
Workday continues to demonstrate operational stability. Revenue for the fiscal first quarter climbed 13.5% to $2.542 billion. The 12-month subscription backlog gained 15.5% to $8.806 billion.
| Operating measure | Fiscal Q1 2027 | Year-over-year change |
|---|---|---|
| Total revenue | $2.542 billion | up 13.5% |
| Subscription revenue | $2.354 billion | increased 14.3% |
| 12-month subscription backlog | $8.806 billion | rose 15.5% |
| Free cash flow | $616 million | up 46.3% |
Chief Executive Aneel Bhusri stated, “Workday is ready for this AI moment.” The company has also raised its non-GAAP operating-margin forecast to 30.5%. Workday results
Analysts’ target prices have slipped behind the market’s takeover value. On average, their target stood at $174.96—11.5% under Friday’s closing level. Two newly issued buy ratings featured targets lower than the current share price.
| Analyst | Firm | Recommendation | Target | Vs. $197.58 |
|---|---|---|---|---|
| Daniel Jester | BMO Capital | Buy | $182 | -7.9% |
| Scott Berg | Needham | Buy | $180 | -8.9% |
| Karl Keirstead | UBS | Hold | $220 | +11.3% |
| Brent Thill | Jefferies | Hold | $205 | +3.8% |
The variation is significant. Workday’s share price not only includes independent earnings projections but also factors in an implicit chance of a potential takeover proposal.
Some peers gave back a portion of Thursday’s gains. Shares of ServiceNow Inc. NYSE:NOW declined 3.2%. Salesforce Inc. NYSE:CRM slid 2.2%, and HubSpot Inc. NYSE:HUBS retreated 3.9%.
| Software stock | Friday price | Friday change | Market value |
|---|---|---|---|
| Workday | $197.58 | down 4.3% | $49.62 billion |
| ServiceNow | $123.22 | down 3.2% | $126.97 billion |
| Salesforce | $197.01 | down 2.2% | $161.59 billion |
| HubSpot | $231.21 | down 3.9% | $11.52 billion |
The joint pullback indicates traders are dialing back expectations of takeover ripple effects. Workday stands apart, with its premium still sizable enough to require tangible financing developments.
Risks: Discussions could end without a proposal. Any offer may encounter challenges such as securing financing, regulatory approval or winning shareholder support. Workday is also set to announce quarterly earnings later this month, which could alter its standalone valuation.
Friday’s valuation narrows options. A slight premium could underwhelm investors, while a higher premium would need one of the largest software financing deals in private equity.
Related articles: NASDAQ:WDAY
