Workday Inc (NASDAQ:WDAY) shares tanked in early trading and into the early afternoon of Friday, even after the company reported upbeat earnings for the first quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

BofA Securities On Workday

Analyst Brad Sills maintained a Buy rating while cutting the price target from $310 to $275.

Workday’s quarterly results and outlook were impacted by macro pressure in Europe, Sills said in a note. “Q1 cRPO growth of 18% was in line with guidance, a break from the usual 1-2% point beat,” he added.

Management lowered the fiscal 2025 guidance for subscription revenue by $35 million to $7.713 billion, representing 17% growth, the analyst stated. “Softer large new deals and slower headcount growth more broadly were cited as the cause for the weaker outlook,” he further wrote.

Stifel On Workday

Analyst Brad Reback reiterated a Hold rating while reducing the price target from $290 to $250.

Workday delivered limited upside in the fiscal first quarter, with slightly higher-than-expected subscription revenue growth of 19% year-on-year, and a 12-month backlog of 18%, in-line with expectations, Reback said. “Management noted continued heightened deal scrutiny, especially in EMEA, as well as lower customer head count renewal levels, both of which management expects to persist through FY25,” he added.

While these headwinds resulted in management trimming the full-year subscription revenue guidance, they raised the operating margin expectations by 50 basis points (bps) “on solid operating leverage within the business,” the analyst stated. The company is unlikely to reaccelerate to 20% and above subscription growth in the near term, “without more meaningful progress on uphill battles vs. well-entrenched-rivals in large enterprise FINS deals and internationally,” he further wrote.

Piper Sandler On Workday

Analyst Brent Bracelin maintained an Overweight rating, while slashing the price target from $330 to $280.

Workday cited two reasons for cutting its growth outlook, namely, intensifying macro headwinds, “evident by more scrutiny on both large deals and net new deals,” and slower than expected customer headcount expansion on renewals, which is “unlikely to reverse,” Bracelin said.

cRPO growth of 18% year-on-year marked a slowdown from 20% in the previous quarter, while the expectations of it decelerating further to 15%-16% in the second quarter on weaker bookings “is likely to raise broader concerns about the durability of the 17-19% growth targets (three-year),” the analyst added.