Published: November 27, 2025 — Previewing the Black Friday session (November 28, 2025)
Workday, Inc. (NASDAQ: WDAY) heads into tomorrow’s shortened Black Friday trading session under pressure, even after delivering a clean earnings beat and doubling down on its artificial intelligence (AI) strategy.
Shares have dropped sharply since the company reported fiscal Q3 2026 results on November 25, as investors focused less on the beat and more on Workday’s “just‑above‑consensus” subscription revenue guidance and signs of softer demand in parts of its customer base. Investor Relations | Workday
Below is a full rundown of what’s driving Workday stock right now, and the key themes to watch before the U.S. market opens on Friday, November 28, 2025.
1. Market backdrop: early close and a tech‑driven Thanksgiving week
U.S. stock markets are closed today, Thursday, November 27, for Thanksgiving, and will reopen tomorrow, Friday, November 28, on a shortened schedule, with the NYSE and Nasdaq closing at 1:00 p.m. Eastern Time. TechStock²
Heading into the holiday, Wall Street has been in a bullish mood:
- On Wednesday, November 26, the S&P 500 and Dow each gained about 0.7%, while the Nasdaq climbed roughly 0.8%, marking a fourth straight session of gains. Investopedia
- The move has been supported by expectations for another Federal Reserve rate cut in December and continued enthusiasm for AI‑linked names broadly. TechStock²
Against that constructive backdrop, Workday has been an outlier on the downside, making it one of the more closely watched software stocks going into tomorrow’s early‑close session.
2. Q3 FY26: strong growth and margins, powered by AI
Workday’s fiscal Q3 2026 (quarter ended October 31, 2025) numbers were solid on almost every traditional metric. According to the company’s earnings release and subsequent coverage: Investor Relations | Workday
- Total revenue: $2.432 billion, up 12.6% year over year.
- Subscription revenue: $2.244 billion, up 14.6% year over year, and making up the large majority of sales.
- GAAP net income: about $252 million, or $0.94 per diluted share, up from $193 million, or $0.72, a year earlier. TradingView
- Non‑GAAP EPS:$2.32, versus $1.89 in the prior‑year quarter, beating consensus by roughly $0.15–$0.19 per share. Investor Relations | Workday
- Operating leverage: GAAP operating margin improved to about 10.7% (from 7.6%), while non‑GAAP operating margin rose to roughly 28.5% (from 26.3%). Investor Relations | Workday
- Backlog strength: 12‑month subscription revenue backlog reached $8.21 billion, up 17.6%, with total subscription backlog around $25.96 billion, also up ~17%. Investor Relations | Workday
Zacks/Workday coverage highlighted broad‑based demand across education, healthcare, financial services, tech and media, helped by strong uptake of Workday’s AI‑enhanced human capital management (HCM) and financial solutions. TradingView
In short: fundamentals in Q3 looked robust, with revenue, earnings, margins and backlog all moving in the right direction.
3. So why did the stock sell off? “Lukewarm” outlook and demand concerns
The post‑earnings story has been less about the quarter just reported and more about what happens next.
Q4 and full‑year guidance: a modest step up
Workday’s guidance from its Q3 release: Investor Relations | Workday
- Q4 FY26 subscription revenue: about $2.355–2.36 billion, implying around 15.5–16% growth.
- Full‑year FY26 subscription revenue: lifted to roughly $8.828–8.83 billion, about 14–14.4% growth.
- Non‑GAAP operating margin: at least 28.5% in Q4 and around 29% for the full year.
Those numbers are slightly above Wall Street estimates, but only by a narrow margin. Reuters described the Q3 subscription revenue as “lukewarm” and noted that the Q4 outlook was only just ahead of consensus, contributing to a nearly 7% slide in the shares in after‑hours trading after the release. Reuters
Investopedia likewise flagged Workday as the biggest loser in the S&P 500 on Wednesday, with the stock down nearly 8% on the day, citing investor disappointment over the fourth‑quarter subscription guidance and reports of weaker demand from higher‑education and some corporate customers. Investopedia
M&A and “quality of growth” questions
In addition to near‑term guidance, some analysts have pointed to concerns that parts of Workday’s remaining performance obligations (RPO/cRPO) growth may be boosted by acquisitions, rather than purely organic expansion, especially after its recent string of AI and integration deals. Seeking Alpha
That doesn’t negate the growth, but it changes the narrative from “pure organic AI rocket ship” to “hybrid of internal innovation plus M&A,” which can make investors more sensitive to valuation and integration risk.
4. How Workday stock is trading into the holiday
As of the latest session before Thanksgiving:
- WDAY last traded around $215 per share, after opening near that level on a large gap down from a pre‑earnings close around $233–234. MarketBeat
- The move leaves the stock roughly 27% below its 12‑month high of $294 and only modestly above its 12‑month low near $205. MarketBeat
MarketBeat’s post‑earnings coverage notes that: MarketBeat
- KeyCorp cut its price target from $285 to $260 while maintaining an Overweight rating.
- Workday still carries a “Moderate Buy” consensus rating, with an average target price around $284–285 per share.
- Insiders have been net sellers over the last three months, unloading roughly 265,000 shares worth about $61 million, though insiders still own about 20% of the company, and institutional investors hold close to 90% of the float.
In other words, positioning is institutionally heavy, insiders have taken some profits, and the stock has quickly moved from the upper part of its 52‑week range toward the lower end.
5. Analyst sentiment: targets down, but the story isn’t broken
Despite the selloff, the analyst community remains broadly constructive on Workday.
Recent commentary includes:
- Citizens JMP / Citizens: Reiterated a “Market Outperform” rating with a $315 price target, implying roughly 40–45% upside from current levels. MarketBeat
- KeyBanc Capital Markets: Kept an Overweight rating but cut its target from $285 to $260, citing the softer‑than‑hoped outlook. Benzinga
- RBC Capital Markets: Maintained Outperform while trimming its target from $340 to $320. Benzinga
- Guggenheim: Reiterated a Neutral rating with a $285 target. Benzinga
- Stifel: Lowered its target from $255 to $235 and kept a Hold rating, explicitly calling the guidance “not conservative” — i.e., leaving less room for upside surprise. Streetinsider
Across Wall Street, data aggregators show dozens of Buy ratings, very few Holds, and virtually no Sells, with consensus price targets in the mid‑$280s and some bull cases stretching into the low‑to‑mid $300s. MarketBeat
A recent stock‑analysis piece estimated a 28–29% potential upside from current prices based on an average target around $277–280 and highlighted that: Directors Talk Interviews
- Workday’s market cap sits in the high‑$50 billion to low‑$60 billion range.
- Its forward P/E ratio is around 20x on some estimates, while GAAP and other trailing metrics are meaningfully higher, underscoring a premium valuation relative to the broader market.
Takeaway: The street has dialed back its optimism at the margin but still views Workday as a long‑term AI‑enabled compounder. The disappointment is about the slope of the growth curve, not the existence of growth.
6. The AI and platform story: Sana, Pipedream, Illuminate and more
Beyond quarterly numbers, Workday is aggressively trying to position itself as an enterprise AI platform, not just a cloud HR/payroll vendor. Several recent moves matter for the stock narrative:
6.1 Illuminate AI agents for HR and finance
In September, Workday announced Illuminate™ agents, purpose‑built AI agents embedded directly into HR and finance workflows. These agents aim to take on complex processes like performance reviews, workforce planning and financial close, turning Workday from a passive system of record into an active “system of action.” Newsroom | Workday
Management’s message: AI shouldn’t be a bolt‑on chatbot; it should live in the flow of work, using Workday’s deep understanding of org structures, approvals and financial rules.
6.2 Sana: the “front door for work”
On November 4, Workday completed its acquisition of Sana, an AI company focused on enterprise knowledge and learning. Investor Relations | Workday
- Workday says Sana will help create a single, intelligent interface where employees can search across systems, learn, and interact with AI agents in one place.
- The goal is to make Workday the “front door for work”, with Sana’s AI‑native agents and learning tools layered on top of Workday’s people and money data.
Independent commentary has framed this as one of Workday’s boldest bets—akin to building an “AI operating system for work” that unifies knowledge management, workflow automation, and learning in one hub. LinkedIn
6.3 Pipedream: wiring AI agents into 3,000+ apps
On November 19, Workday announced a definitive agreement to acquire Pipedream, an integration platform with more than 3,000 pre‑built connectors into popular business apps like Asana, HubSpot, Jira, Recurly and Slack. Investor Relations | Workday
- Pipedream is designed to let AI agents trigger workflows, pull data and execute tasks across all the systems where work actually happens.
- Combined with Sana and other AI acquisitions like Flowise, Workday is building an end‑to‑end platform for AI agents: intelligence, orchestration and connectivity under one roof. Investor Relations | Workday
The transaction is expected to close in Q4 FY26, subject to customary conditions. Investor Relations | Workday
6.4 Open ecosystem, Google BigQuery and EU Sovereign Cloud
In parallel, Workday has been expanding its open ecosystem:
- A new global developer network and Workday Build program aimed at training AI developers and giving them tools to build extensions and agents on Workday. Investor Relations | Workday
- Google BigQuery joined Workday Data Cloud, allowing customers to analyze Workday HR and finance data in Google Cloud without copying it, and then feed AI‑driven insights back into Workday. Investor Relations | Workday
- Workday EU Sovereign Cloud, launched on November 19, offers EU‑based customers AI‑powered HR and finance with full EU data residency and local control, addressing data‑sovereignty and regulatory concerns in Europe. Investor Relations | Workday
For investors, this stack—core HCM/finance + AI agents + developer ecosystem + sovereign cloud—is central to the long‑term bull case.
7. Valuation and risks heading into Friday’s session
Premium valuation
Depending on which metric you use:
- Workday trades at a forward P/E in the low‑20s on some estimates, but much higher on GAAP trailing earnings, reflecting the impact of stock‑based compensation and heavy R&D. Directors Talk Interviews
- Free cash flow is strong and growing, with Q3 free cash flow of about $550 million and more than $1.5 billion generated over the first nine months of the fiscal year. Investor Relations | Workday
This leaves Workday clearly in “quality growth at a premium” territory. After the recent selloff, some valuation models still peg fair value above current prices (e.g., community fair value ranges in the low‑$200s to mid‑$300s), but there’s wide disagreement, which often leads to volatility. Simply Wall St
Key risks to keep in mind
- Macro and IT‑spending sensitivity
Workday’s customers are large enterprises and public‑sector entities that can delay or resize projects when budgets tighten. The Reuters piece specifically highlighted sluggish demand from higher‑education customers dealing with funding pressures, which could persist if macro conditions stay uncertain. Reuters - Competition from Oracle, SAP, ADP and others
Workday competes with well‑funded incumbents across HR, payroll and enterprise resource planning. Any sign that rivals are winning big deals, especially in AI‑enhanced offerings, could pressure growth or pricing. Reuters - M&A integration and “AI fatigue”
The Sana and Pipedream deals, along with Flowise and others, must be successfully integrated to deliver the promised “AI operating system for work.” Analysts are already watching whether growth in backlog and cRPO is M&A‑driven vs. organic. If customers perceive the AI roadmap as confusing or fragmented, adoption could slow. Seeking Alpha - Regulatory and data‑sovereignty complexity
Initiatives like EU Sovereign Cloud are designed to address regulatory risk, but they also add operating complexity and capital needs. Missteps in compliance, privacy or AI governance could be costly. Investor Relations | Workday
8. What to watch before and after the November 28, 2025 open
Going into tomorrow’s early‑close Black Friday session, here are the main watchpoints for Workday stock:
- Follow‑through on the gap down
Does the stock see continued selling as markets reopen, or do long‑only funds and AI‑themed investors step in to buy the dip after a roughly 7–8% post‑earnings slide? Investopedia - Volume vs. price action on a low‑liquidity day
Black Friday sessions are usually thinly traded, which can exaggerate moves in either direction. A big price swing on light volume may be less informative than a moderate move on heavy volume. TechStock² - Fresh analyst notes and target changes
The first wave of post‑earnings revisions is in, but more houses may update models over the next few days. Additional downgrades or deeper target cuts could cap any near‑term rebound, while high‑conviction buy calls might stabilize sentiment. Benzinga - Narrative around AI and M&A
Watch for commentary that either reinforces the idea of a coherent AI platform strategy (Sana + Pipedream + Illuminate + EU Sovereign Cloud) or, conversely, frames Workday as chasing multiple AI trends via acquisitions. That narrative will influence how much investors are willing to pay for each point of growth. Investor Relations | Workday - Broader tech and rates sentiment
If the broader market’s Thanksgiving‑week rally in tech and AI names continues, Workday might find a tailwind. If macro headlines shift toward hawkish Fed expectations or weak enterprise spending, the stock could remain under pressure. TechStock²
9. Bottom line
Heading into the November 28, 2025 open, Workday sits at a crossroads:
- Fundamentals and AI strategy: Q3 results showed solid double‑digit growth, rising margins and a deepening AI and data‑platform story, bolstered by the Sana acquisition, the planned Pipedream deal, and new partnerships with Google BigQuery and EU‑focused cloud offerings. Investor Relations | Workday
- Sentiment and valuation: The stock has suffered a sharp pullback after what many outlets called a “lukewarm” subscription‑revenue outlook, but analysts remain broadly positive with upside‑skewed targets and recognition that Workday is still an AI beneficiary with meaningful free cash flow. Directors Talk Interviews
For traders and investors watching WDAY before the bell tomorrow, the key question is whether this selloff represents a recalibration of expectations or the start of a more prolonged de‑rating as the market digests mixed signals on demand and M&A‑driven growth.
Either way, Workday is likely to remain in the spotlight through the end of the year as a bellwether for enterprise AI adoption, subscription‑software resilience and how much investors are still willing to pay for high‑quality, cloud‑based growth stories.
This article is for informational purposes only and does not constitute investment advice, a recommendation to buy or sell any security, or a solicitation of any kind. Always conduct your own research or consult a qualified financial professional before making investment decisions.
