BTIG analyst Allan Verkhovski downgraded Workday to Neutral from Buy, citing overly optimistic cRPO and subscription revenue growth estimates, and limited adoption of Flex Credits. The downgrade suggests potential headwinds for Workday's stock performance, despite recent buyout talks.
BTIG analyst Allan Verkhovski downgraded Workday (WDAY) to Neutral from Buy, expressing concerns that consensus estimates for current remaining performance obligation (cRPO) and fiscal 2027 subscription revenue growth are 'overly optimistic' and 'too aggressive.' The analyst also highlighted 'limited adoption' of Workday's new Flex Credits, particularly among larger customers, due to uncertainty around usage-based pricing. This downgrade, coupled with the analyst's projection of decelerating growth, suggests potential short-term pressure on Workday's stock as investor sentiment shifts. While recent reports of buyout talks with a private equity firm could offer a floor, the fundamental concerns about growth and product adoption present a key risk for traders, potentially leading to further downward revisions or underperformance relative to peers.