Workday, Inc. (NASDAQ:WDAY) shares are trading lower Wednesday despite a third-quarter earnings beat. Several analysts lowered price targets following the print.

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What To Know: Workday reported adjusted earnings per share of $2.32 for the third quarter, beating the consensus estimate of $2.18. In addition, the company reported revenue of $2.43 billion, beating the consensus estimate of $2.41 billion.

The quarter showed continued growth across key metrics. Subscription revenue climbed 14.6% year-over-year to $2.24 billion, and operating income improved to $259 million, up from $165 million in the same period last year.

Workday ended the period with a 12-month subscription revenue backlog of $8.21 billion, up 17.6% year-over-year, supported in part by the acquisition of Paradox. Operating cash flows rose to $588 million and free cash flow reached $550 million. The company also repurchased 3.4 million shares for $803 million during the quarter.

Management highlighted momentum across its AI portfolio and ongoing innovation in its platform. Recent business updates included new customer wins, expanded enterprise relationships, the launch of multiple AI-driven tools and the completion of acquisitions focused on conversational hiring and enterprise knowledge solutions.

Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments.

• Bernstein analyst Mark Moerdler maintained an Outperform rating on Workday and lowered the price target from $304 to $298.
• Keybanc analyst Jason Celino maintained an Overweight rating on Workday and lowered the price target from $285 to $260.
• Stifel analyst Brad Reback maintained a Hold rating on Workday and lowered the price target from $255 to $235.
• RBC Capital analyst Rishi Jaluria maintained an Outperform rating on Workday and lowered the price target from $340 to $320.
• Morgan Stanley analyst Keith Weiss maintained an Equal-Weight rating on Workday and raised the price target from $255 to $280.