Shares of Workday Inc. /zigman2/quotes/201157610/composite WDAY +0.63% are off 1.8% in premarket trading Friday while shares of Splunk Inc. /zigman2/quotes/203060494/composite SPLK -0.88% are down 2.1% after Cowen & Co. analyst analyst J. Derrick Wood downgraded the stocks to market perform from outperform. Workday's "heavy reliance on bookings from new customers creates outsized risk to growth," he wrote. "Conversely, companies like Salesforce /zigman2/quotes/200515854/composite CRM +0.66% and ServiceNow /zigman2/quotes/202729495/composite NOW -0.08% generate a much higher percentage of bookings from expansions," Wood said, and his "recent industry checks suggest that new customer generation is poised to be much more difficult in this environment." He lowered his price target to $160 from $220. On Splunk, Wood worries about the company's "heavy reliance on large deals and high-tough engagements." He sees heightened execution risk for the company and said his channel checks indicate that the company has seen "elevated sales turnover" in the past six months. Wood cut his price target to $140 from $165 on Splunk shares, which have fallen 16% so far this year as Workday's stock has declined 23% as as the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.30% has lost 15%.