WDAY heads into its August 25 earnings report with an unusual configuration: shorts are covering aggressively, options traders have swung decisively bullish, and the stock has rallied 30% over the past month — yet the mean analyst target sits below the current price.
The most striking move this week is in short positioning. Bears are retreating at pace. Short interest dropped 8% in a single session on August 11, pulling the total down to 11.7% of the free float — the lowest reading in roughly six weeks, after peaking near 14% in mid-July. Over the past month, shorts have unwound more than 11% of their position. That's a meaningful shift for a stock carrying this level of short interest, and it has coincided almost exactly with the 30% price rally. The borrow market reflects a low-pressure environment: cost to borrow is just 0.48%, barely changed on the week, and availability is running at roughly 457% of current short interest — well into the comfortable zone, meaning there is no squeeze dynamic forcing these covers. Shorts are choosing to exit, not being squeezed out.
Options traders have reinforced that directional tilt. The put/call ratio dropped to 0.96 on August 11, more than two standard deviations below its 20-day average of 1.07 — the most bullish options reading in the past year relative to recent norms. The PCR had been running persistently above 1.0 since early July, signalling cautious hedging through the rally. The break lower this week suggests that caution has faded, and call demand is now outpacing put demand heading into the print. The ORTEX short score has eased modestly to 59.6 from 61.3 a week ago, consistent with the broader softening in bearish positioning.
The Street, however, is more divided than the market's recent optimism implies. The analyst consensus mean target of $169.97 is now roughly 6% below the current price of $181.27 — meaning the average analyst view implies a modest haircut from here. The picture within that consensus is genuinely split. Wells Fargo's Michael Turrin raised his target to $215 this week, maintaining Overweight — a fresh bullish data point from a firm that has been consistently positive on the name. Against that, Morgan Stanley downgraded to Underweight on July 21, cutting the target to $145, while CLSA initiated at Underperform with a $92 target in July. Goldman Sachs, which was Neutral heading into the May earnings, took its target down to $151 in late May. The bull case centres on Workday's AI positioning and platform stickiness. Bears point to margin expansion limits — the FY27 operating margin guide of roughly 30.5% — and the risk that corporate IT budgets tighten further. Valuation multiples have expanded sharply with the rally: the price-to-book has risen 0.83x over the past 30 days and the P/E has moved up nearly 3 points in the same window, compressing the margin of safety that cautious analysts cite.
Founder Dave Duffield sold approximately $12.6 million worth of shares across multiple transactions on July 9, when the stock was trading near $135-139. The sales came before the sharpest leg of the rally and carry a trade significance score of just 2 out of 10 — likely routine. His institutional stake of 14.8% remains the largest single holding, so the trim is modest in context. BlackRock added roughly 1 million shares through July, the most notable institutional accumulation in the most recent period.
Earnings reaction history adds relevant texture. The last two quarterly prints produced negative next-day moves — down 6% after the June 2026 report and down 2.8% after May. Five-day returns have been volatile in both directions, swinging from -11% to +16% over those same windows. A stock that has rallied 30% into a report with a mixed analyst consensus and a history of post-earnings softness is a setup worth watching closely — particularly whether the short covers of the past week hold or reverse if the August 25 print disappoints relative to elevated expectations. With NOW and GWRE each posting stronger weekly gains and INTA up more than 21% on the week, the enterprise software backdrop is broadly supportive, but WDAY's relative performance and positioning into the print will be the real test.
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