Rosenblatt Remains Cautious on Workday (WDAY) Amid Market Saturation and Intensifying Competition

Core Insights - Workday, Inc. (NASDAQ:WDAY) is recognized for its potential in the AI sector, securing a position among the 15 best AI stocks to monitor in December 2025 [1] - DA Davidson maintains a cautious stance on Workday, reiterating a "Hold" rating with a price target of $235, citing market saturation and competition as challenges for the Core HCM segment [2] - Despite strong growth in the Financial Management portfolio and international operations, these segments have not significantly enhanced the overall growth profile of the company [2] - Cross-selling and up-selling efforts are highlighted as strong contributors to bookings, with expectations of margin improvements supporting the price target [3] - Workday reported a 12.6% revenue growth in fiscal Q3 2026, driven by a 14.6% increase in subscription revenue, alongside improved operating margins and cash flows [4] - The subscription revenue backlog showed double-digit growth due to new customers and expanded enterprise relationships, as well as contributions from acquisitions like Paradox [4] - The company has launched multiple AI-focused products and partnerships, reinforcing its innovation pipeline, although short-term growth concerns persist [4] - While Workday is recognized for its enterprise AI platform, some analysts suggest that other AI stocks may offer greater upside potential with less downside risk [5]