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Based in Minneapolis, Dayforce Inc. (DAY) is a leading human capital management software company valued at $8.7 billion by market cap. The company offers Dayforce, a cloud-based HCM platform with features for human resources, payroll and tax, workforce management, benefits, and talent intelligence, as well as Powerpay, a cloud HR and payroll solution for small businesses. Additionally, Dayforce provides payroll services, implementation, and professional services.
Shares of DAY have underperformed the broader market over the past year. The stock has declined 23.6% over this time frame, while the broader S&P 500 Index ($SPX) has surged 26.1%. In 2024, DAY fell 17.5%, lagging SPX's 16.5% gains on a YTD basis.
Zooming in further, DAY has also trailed behind the SPDR S&P Software & Services ETF (XSW), which has gained about 17.2% over the past year.
On Jul. 31, Dayforce reported its Q2 earnings, and the stock popped 10.4%. Its EPS of $0.48 exceeded the consensus estimate of $0.37. The company’s revenue for the quarter was $423.3 million, surpassing expectations by 1.4% and up from $365.9 million a year earlier. Dayforce revised its fiscal 2024 revenue forecast upward, now anticipating revenue between $1.74 billion and $1.75 billion.
For the current fiscal year, ending in December, analysts expect DAY’s EPS to grow 66.2% year over year to $1.08 on a diluted basis. However, the company's earnings surprise history is mixed. While it beat the consensus estimate in three of the last four quarters, it missed one other occasion.
Among the 16 analysts covering Dayforce stock, the overall consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
This configuration is slightly more bullish than a month before, with eight analysts suggesting a "Strong Buy."
On Aug. 1, Deutsche Bank Aktiengesellschaft (DB) boosted Dayforce's target price from $70 to $75 and maintained a “Buy” rating on the stock.
The mean price target of $70.07 represents a 26.5% premium from DAY’s current price levels. The Street-high price target of $87 suggests an impressive upside potential of 57%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
