Jefferies raised its price target on Workday to $205 from $140 while maintaining a ‘Hold’ rating.

  • UBS lifted its target to $220 from $140 while keeping a ‘Neutral’ rating, with the firm saying that checks with Workday partners pointed to “modestly improving sentiment” and stable core demand.
  • Needham maintained a ‘Buy’ rating and $180 price target, but said a fair acquisition price for Workday could be $240 to $250 per share.
  • The firm also flagged potential financing risks given current sentiment around private credit's involvement in software, while calling Workday the most logical application software acquisition.

Workday Inc. (WDAY) could have more room to pursue an aggressive artificial intelligence strategy and reignite revenue growth if it is taken private by Silver Lake, according to Jefferies analysts.

Jefferies raised its price target on Workday to $205 from $140 while maintaining a ‘Hold’ rating, citing “many reasons” for Silver Lake being interested in the company, according to TheFly.

Workday shares traded marginally in the green in Friday’s pre-market trade after soaring nearly 18% on Thursday. WDAY was among the top trending tickers on Stocktwits at the time of writing.

Wall Street Weighs WDAY Takeover Potential

Several analysts raised their price targets on Workday following news of Silver Lake’s potential acquisition, with the targets ranging from $180 to $220 per share.

Baird raised its price target to $215 from $190 and maintained an ‘Outperform’ rating, updating its model following its initial assessment of the potential takeover.

UBS lifted its target to $220 from $140 while keeping a ‘Neutral’ rating. The firm said checks with Workday partners pointed to “modestly improving sentiment” and stable core demand. Financials remains the key growth driver, while AI adoption is progressing but is still too early to meaningfully affect revenue or drive material displacement, according to the firm.

Needham maintained a ‘Buy’ rating and $180 price target, but said a fair acquisition price for Workday could be $240 to $250 per share, citing recent Dayforce and Paycor HCM acquisitions. The firm also flagged potential financing risks given current sentiment around private credit's involvement in software, while calling Workday the most logical application software acquisition.

Ives Does Not See A ‘SaaS Apocalypse’ Due To AI

Tech strategist Dan Ives downplayed concerns about a “SaaS apocalypse” driven by AI during an interview with CNBC, saying that Silver Lake’s plans to acquire Workday and take it private show that smart money recognizes the sector's value.

He added that while there are headwinds in the software sector due to AI, the Workday deal reports are a positive sign for the sector rather than a cause for concern.

“Software is going to be a major piece of this AI revolution. Is it today? No. But when you look at the use cases over six, 12, 18 months… Palantir at the end of the day is a software company, and look at the growth they’ve seen,” he said.

Silver Lake's WDAY Takeover Talks

Silver Lake is in talks to acquire Workday, according to a report by Reuters on Thursday. The private equity firm and Workday have held discussions about a potential deal in recent months, though the talks remain ongoing and there is no guarantee a transaction will materialize.

Silver Lake could bring in additional investors to help finance the deal, according to the report. The firm previously teamed up with Saudi Arabia’s Public Investment Fund and Affinity Partners on its roughly $55 billion take-private acquisition of Electronic Arts last year, with the deal completed earlier this month.

What Retail Traders Think Of WDAY Stock

Retail sentiment on Stocktwits around Workday trended in the ‘extremely bullish’ territory with message volumes at ‘extremely high’ levels at the time of writing.

WDAY stock is down 4% year-to-date and 7% over the past 12 months. The S&P 500 ETF (SPY) is up 21% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 26%.

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