Dayforce Inc’s Stock Performance: A Closer Look at Recent Developments
With a market cap of $11.8 billion, Dayforce Inc (DAY), located in Minneapolis, is a key player in the human capital management (HCM) software industry. Their cloud-based products, Dayforce and Powerpay, deliver payroll, workforce management, benefits, and talent solutions to businesses worldwide.
Recent Market Performance Highlights
In the past year, Dayforce’s stock performance has lagged behind the overall market. Over the last 52 weeks, DAY has increased by 7.9%, whereas the S&P 500 Index ($SPX) has surged by 31.1%. As of 2024, DAY has gained 11.4%, compared to a 24.1% increase in the S&P 500.
When comparing further, DAY’s struggles stand out against the Fidelity Cloud Computing ETF’s (FCLD) impressive 37.5% gain for the past year and a 22.9% year-to-date return.
Strong Q3 Results Boost Investor Confidence
On October 30, shares of Dayforce jumped 7.3% following their Q3 revenue report of $440 million, along with an adjusted EPS of $0.47. Notably, the company reported a 19% increase in recurring revenue from the previous year, a remarkable 54% rise in operating cash flow, and an optimistic adjusted EBITDA outlook for the near future. Furthermore, the company revised its full-year revenue forecast up to $1.8 billion, which likely contributed to renewed investor enthusiasm. Plans for a share repurchase program and upcoming HR technology innovations also supported this positive sentiment.
For the fiscal year ending in December, analysts project DAY’s EPS to grow by 64.6%, reaching $1.07. Their record for earnings surprises has been mixed—Dayforce surpassed consensus predictions in two of the last four quarters but fell short on two occasions.
Analyst Consensus and Price Target Adjustments
Currently, of the 19 analysts covering the stock, the overall consensus rating remains at “Moderate Buy.” This includes 10 “Strong Buy” ratings, one “Moderate Buy,” and eight “Hold” assessments. Compared to three months ago, this positioning shows a slight increase in bullish sentiment, which previously featured nine “Strong Buy” ratings.
On November 14, KeyBanc raised its price target on DAY to $92 while maintaining an “Overweight” rating. Although projected recurring revenue growth has been slightly reduced, the firm remains optimistic about Dayforce’s focus on profitability and its goal of achieving $1 billion in free cash flow.
At the time of writing, DAY is trading below the average price target of $82.94. The highest price target on the street is set at $95, suggesting a potential upside of 27.1% from the current trading price.
On the publication date, Sohini Mondal did not hold any positions in the securities mentioned in this article. The information provided is solely for informational purposes. For further details, please refer to the Barchart Disclosure Policy here.
The views expressed in this article are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
