Workday (WDAY): How Does Valuation Stack Up After Major AI, Cloud, and Partner Launches at HR Tech 2025?

Workday (WDAY) just dropped a flood of updates at HR Tech 2025, grabbing the spotlight with a handful of big launches and new partnerships. From unveiling Workday Data Cloud to rolling out the Illuminate family of AI agents and announcing deep integrations with major tech partners, the company is openly betting that AI-driven automation and unified data are the future of work. For investors, this steady drumbeat of product news feels like a carefully orchestrated signal rather than mere coincidence, raising the question of what’s next for Workday’s growth story.

Yet, the market’s reaction so far has been lukewarm. Despite Workday’s push into everything from embedded AI in HR and Finance to more open partnerships, with names like Microsoft and Databricks on the list, the stock has declined 13% year-to-date and is down 12% over the past year. That softness follows a three-year stretch of strong returns, making the slowdown in momentum this year stand out even more as the company leans harder into innovation and ecosystem expansion.

With all these ambitious moves playing out against shifting sentiment in the share price, are we looking at a compelling entry point for Workday, or is the market already baking future gains into the current valuation?

Most Popular Narrative: 21.5% Undervalued

According to the most widely followed analyst narrative, Workday is currently viewed as significantly undervalued compared to its estimated fair value. The narrative lays out a bullish case grounded in both top-line growth catalysts and operational efficiency initiatives that could propel future profitability. This supports a target well above the present share price.

Workday is positioned to benefit from the accelerating demand for cloud-native and AI-powered enterprise solutions. As organizations continue replacing legacy on-premise systems and prioritize digital transformation, this drives sustained subscription revenue growth and expands backlog.

Wondering what is powering this optimistic price target? The narrative points to a combination of rapid innovation, expansion into new markets, and some ambitious margin improvements. But how aggressive are these forecasts, and is the profit growth story really as straightforward as it looks? The answer could reshape your outlook on where Workday is really headed and how much upside remains on the table.

Result: Fair Value of $279.05 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rapid advances by AI-powered rivals or increased regulatory hurdles could quickly challenge Workday’s positive outlook and put pressure on future growth expectations.

Find out about the key risks to this Workday narrative.

Another Perspective: Still Looks Pricey

Looking at things through a different lens, the market measure most investors defer to suggests Workday is expensive compared to the broader US software industry. This challenges the undervalued view and raises a new question: is the company's growth strong enough to justify paying a premium?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Workday to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Workday Narrative

If you want to dig into the numbers yourself or have your own perspective, you can craft a unique story around Workday in just a few minutes. Do it your way

A great starting point for your Workday research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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