When a billionaire investor exits the same stock twice in one year, it's worth paying attention. Dan Loeb's Third Point LLC completely dumped its Workday (WDAY) stake in the third quarter of 2025, liquidating 300,000 shares. The twist? This marks the second time Third Point fully exited the enterprise software company this year, having previously sold out entirely in Q1 before apparently jumping back in and then out again.

The timing is curious because Workday's fundamentals don't look terrible on the surface. The company actually beat expectations when it reported third-quarter results in November.

Solid Beat, Mixed Reception

Workday posted adjusted earnings of $2.32 per share, comfortably ahead of the $2.18 analyst consensus. Revenue came in at $2.43 billion versus expectations of $2.41 billion. The company's 12-month subscription revenue backlog hit $8.21 billion, up 17.6% year-over-year, helped along by the acquisition of Paradox. Management talked up momentum in its AI portfolio and continued platform innovation.

So why the lukewarm response from the Street? The devil's in the details. RBC Capital analyst Rishi Jaluria, who maintains an Outperform rating, still cut his price target from $340 to $320. His concern: strip out the Paradox acquisition, and organic revenue growth would have actually missed consensus. Plus, despite raising full-year revenue guidance by more than the quarterly beat, Workday kept its adjusted EBIT margin guidance unchanged, which doesn't exactly scream confidence.

Margin Pressure and Government Headwinds

KeyBanc analyst Jason Celino also trimmed his price target from $285 to $260 while keeping an Overweight rating. He noted that both subscription and professional services revenue only modestly exceeded estimates, and the fourth-quarter outlook was basically in-line with expectations—nothing to write home about.

The margin story gets more interesting. Workday guided to fiscal 2026 non-GAAP operating margin of around 28.5%, below the 28.7% consensus. Citizens JMP Securities suggested the acquisitions might be weighing on margins. Meanwhile, a Needham analyst flagged an external headwind: "The US federal government shutdown negatively impacted some deals." When a meaningful chunk of your customer base is dealing with budget uncertainty, that's going to show up in the numbers.

Performance Lagging Peers

The stock performance tells a tough story. Over the past year, Workday shares have dropped about 21%, a painful contrast to the 18.51% gain in the Eagle Capital Select Equity ETF (EAGL). Even within its own sector, Workday lagged the Global X Cloud Computing ETF (CLOU), which fell 7.67%—not great, but better than Workday's decline.

The comparison to direct competitors is even more striking. Palantir Technologies exploded 165% higher over the same period, while SAP SE ADS dropped 15.40%. Being down 21% when one of your peers is up triple digits is the kind of relative performance that gets hedge fund managers rethinking their positions.

Third Point's double exit suggests Loeb isn't convinced the recovery story is there yet, despite the AI buzz and decent backlog growth. Sometimes the smartest move is knowing when to walk away—even if you have to do it twice.