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Minneapolis, Minnesota-based Dayforce Inc (DAY) operates as a human capital management software company, offering various cloud-based human resources solutions, including payroll and tax, workforce management, and more. With a market cap of $10.3 billion, its operations span the United States, Canada, and internationally. DAY is expected to announce its Q3 earnings before the market opens on Wednesday, Oct. 30.
Ahead of the event, analysts expect Dayforce to report a profit of $0.25 per share, up 78.6% from $0.14 per share reported in the year-ago quarter. The company has surpassed Wall Street’s earnings estimates in three of the past four quarters while missing on another occasion. Its adjusted EPS for the last reported quarter grew an impressive 283.3% year-over-year to $0.23, exceeding the consensus estimates by 27.8%.
For fiscal 2024, analysts expect the tech major to report an adjusted EPS of $1.07, up 64.6% from $0.65 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to grow 20.6% year-over-year, reaching $1.29.
DAY stock has declined 3.1% in 2024, significantly underperforming the S&P 500 Index’s ($SPX) 21.8% gains and the Technology Select Sector SPDR Fund’s (XLK) 19% returns on a YTD basis.
Although Dayforce has underperformed the broader market in 2024, the stock jumped 10.4% after the release of its impressive Q2 earnings on Jul. 31. The company reported a 19.9% year-over-year increase in recurring revenue, reaching $321.6 million, and total revenues grew 15.7% to $423.3 million, surpassing analysts' expectations. The company also reported a 103 basis points gross margin expansion to 44.1% leading to a 19.8% growth in gross profits to $186.8 million. However, Dayforce posted a net loss of $1.8 million due to rising selling and administrative expenses.
The consensus opinion on DAY stock is cautiously optimistic, with an overall “Moderate Buy” rating. Out of the 18 analysts covering the stock, 10 recommend “Strong Buy,” one advises “Moderate Buy,” and seven suggest a “Hold” rating. This configuration is more bullish than three months ago, with eight analysts suggesting a "Strong Buy." The mean price target of $71.44 represents a potential upside of just 9.8% from current price levels.
On the date of publication, Aditya Sarawgi 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.
