Dayforce Inc (DAY) AI Stock Analysis

• Market Cap: $9.21B
• Dividend Yield: N/A
• Average Volume (3M): 1.70M
• Price to Earnings (P/E): 518.2
• Beta (1Y): 1.42
• Revenue Growth: 14.97%
• EPS Growth: -51.02%
• Country: US
• Employees: 9,600
• Sector: Technology
• Sector Strength: 65
• Industry: Software - Application
• EPS (TTM): 0.58
• Shares Outstanding: 158,262,360
• 10 Day Avg. Volume: 1,592,255
• 30 Day Avg. Volume: 1,701,877
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 15.28
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $69.80
• Price Target Upside: 23.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Dayforce Inc's stock has a solid financial foundation with strong revenue growth and low debt levels. However, its profitability margins need improvement, and the stock appears overvalued with a high P/E ratio. The technical indicators suggest neutral momentum, while the recent earnings call and corporate events provide positive sentiment and strategic direction. Overall, the stock is moderately attractive, with room for growth if profitability and valuation concerns are addressed.

Positive Factors

Market Position

The company is well positioned to deliver leading ex float growth within the HCM comp set with a reasonable path to exceeding consensus FCF estimates.

Partnerships

The company signed its largest ever deal, supporting its upmarket success with partners.

Revenue Growth

Demand remained broadly strong with continued up market strength, which could set Dayforce up for reaccelerating revenue growth in 2026.

Negative Factors

Revenue Estimates

Revenue estimates are reduced slightly across various categories.

Revenue Expectation Changes

Estimates for Adjusted EBITDA and Free Cash Flow are lowered due to changes in revenue expectations.

Valuation Concerns

Primary push backs to recent upgrade have been around relative valuation to comps, risks to growth from its Canada exposure, and the company's expectations management historically.

Dayforce Inc Business Overview & Revenue Model

Company Description

Dayforce Inc., together with its subsidiaries, operates as a human capital management (HCM) software company in the United States, Canada, and internationally. It offers Dayforce, a cloud HCM platform that provides human resources, payroll, benefits, workforce management, and talent management functionality; and Powerpay, a cloud HR and payroll solution for the small business market. The company also provides Bureau solutions for payroll and payroll-related services. It sells its solutions through direct sales force and third-party channels. The company was formerly known as Ceridian HCM Holding Inc. and changed its name to Dayforce Inc. in February 2024. Dayforce Inc. was incorporated in 2013 and is headquartered in Minneapolis, Minnesota.

How the Company Makes Money

Dayforce Inc makes money primarily through a subscription-based revenue model. The company charges its clients recurring fees for the use of its cloud-based HCM software platform. These fees are typically based on the number of employees managed through the system and the specific features and modules utilized by the client. Additionally, Dayforce may generate revenue through professional services, which include implementation, training, and ongoing support. Key factors contributing to its earnings include its ability to retain and expand its client base, the continuous development of new features and functionalities, and strategic partnerships that enhance its product offerings and market reach.

Dayforce Inc Financial Statement Overview

Summary

Dayforce Inc demonstrates strong revenue growth and maintains a stable financial position with low debt levels. While profitability margins have room for improvement, the company's cash flow is robust, highlighting effective cash management. The financial health of Dayforce Inc is solid, with opportunities to enhance profit margins and shareholder returns.

Income Statement

Dayforce Inc has shown impressive revenue growth over the years, with a Revenue Growth Rate of 16.28% from 2023 to 2024. The Gross Profit Margin for 2024 stands at 46.14%, indicating a strong ability to maintain profitability on sales. However, the Net Profit Margin is relatively low at 1.03% for 2024, which suggests that expenses beyond the cost of goods sold are high. EBIT and EBITDA margins have decreased compared to previous years, indicating some operational challenges.

Balance Sheet

The company maintains a healthy balance sheet with a low Debt-to-Equity Ratio of 0.009 in 2024, showcasing financial stability and low leverage risk. The Equity Ratio is at 27.92%, reflecting a strong equity base compared to total assets. Return on Equity is modest at 0.71%, indicating room for improvement in generating returns on shareholders' equity.

Cash Flow

Dayforce Inc's cash flow position is robust, with a significant improvement in Free Cash Flow from 2023 to 2024. The Operating Cash Flow to Net Income Ratio is high at 15.53 for 2024, signifying strong cash generation relative to net income. The Free Cash Flow to Net Income Ratio is also favorable, indicating efficient cash management and the ability to reinvest or return cash to shareholders.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.76B	1.51B	1.25B	1.02B	842.50M
	Gross Profit
812.10M	646.50M	473.20M	382.30M	341.30M
	EBIT
104.10M	133.10M	-34.30M	-54.40M	5.10M
	EBITDA
283.70M	264.60M	54.70M	23.10M	56.90M
	Net Income Common Stockholders
18.10M	54.80M	-73.40M	-75.40M	-4.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
579.70M	570.30M	431.90M	367.50M	188.20M
	Total Assets
9.12B	9.01B	7.92B	7.17B	6.70B
	Total Debt
1.23B	1.24B	1.25B	1.18B	711.90M
	Net Debt
653.20M	673.30M	823.00M	809.20M	523.70M
	Total Liabilities
6.57B	6.61B	5.81B	4.94B	4.60B
	Stockholders Equity
2.55B	2.40B	2.11B	2.23B	2.10B
Cash Flow		Free Cash Flow
171.50M	105.10M	38.10M	-14.90M	-90.00M
	Operating Cash Flow
281.10M	219.50M	132.60M	48.80M	-30.20M
	Investing Cash Flow
-471.90M	-202.80M	-342.50M	-711.10M	38.80M
	Financing Cash Flow
59.60M	242.00M	870.10M	407.50M	565.30M

Dayforce Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.71
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAY, the sentiment is Negative. The current price of 56.71 is above the 20-day moving average (MA) of 56.44, above the 50-day MA of 56.49, and below the 200-day MA of 63.83, indicating a neutral trend. The MACD of 0.17 indicates Negative momentum. The RSI at 49.43 is Neutral, neither overbought nor oversold. The STOCH value of 55.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DAY.

Dayforce Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	80 Outperform	$13.18B	25.49	24.99%	0.59%	9.86%	-14.34%
PCTY	78 Outperform	$10.33B	46.62	19.70%	―	14.63%	17.15%
G	77 Outperform	$8.69B	17.41	22.21%	1.48%	7.33%	-15.86%
PYCR	74 Outperform	$4.09B	―	-1.66%	―	15.72%	74.59%
WNS	72 Outperform	$2.74B	15.23	21.21%	―	-0.64%	30.96%
DAY	70 Outperform	$9.21B	518.17	1.03%	―	14.97%	-51.02%
Sector *	60 Neutral	$10.96B	10.28	-6.73%	2.97%	7.74%	-12.45%

Dayforce Inc Corporate Events

Dayforce Inc Holds 2025 Annual Stockholders Meeting

Dayforce Inc. held its 2025 Annual Meeting of Stockholders on May 2, 2025, where a quorum was achieved with 154,780,459 shares represented. During the meeting, stockholders approved the election of nine directors for a one-year term, endorsed the executive compensation plan, ratified KPMG LLP as the independent auditor for 2025, and approved amendments to the company’s Certificate of Incorporation to limit officer liability and update obsolete provisions.

Spark’s Take on DAY Stock

According to Spark, TipRanks’ AI Analyst, DAY is a Outperform.

Dayforce Inc’s strong financial position and optimistic earnings call sentiment contribute positively to its stock score. However, high valuation metrics and current technical analysis trends present challenges. Recent corporate events, although mixed, show a strategic focus on long-term growth, supporting a moderately positive outlook.

To see Spark’s full report on DAY stock, click here.

Dayforce Inc Approves 2025 Management Incentive Plan

Dayforce, Inc. announced the approval of its 2025 Management Incentive Plan (MIP) by the Board of Directors and the Compensation Committee on March 5, 2025. The plan, covering the period from January 1, 2025, to December 31, 2025, aims to drive company results through key financial metrics and provide incentive compensation to eligible employees. The plan includes performance goals such as revenue growth, free cash flow margin, and sales per employee per month, with incentives split between cash and restricted stock units. Additionally, equity awards were granted to named executive officers, with vesting conditions based on company performance metrics and relative peer performance. The Board also approved an increase in the base salary of CEO David D. Ossip from $800,000 to $1,000,000, effective March 5, 2025.

Dayforce Inc Announces Efficiency Plan for 2025

On February 26, 2025, Dayforce Inc. announced an efficiency plan to enhance profitability and sustainable growth, which includes a 5% workforce reduction to be completed by March 31, 2025. The plan is expected to incur restructuring charges of $18 million to $21 million and generate pre-tax cost savings of $65 million in fiscal year 2025, with the company reinvesting some savings into strategic growth initiatives for long-term positioning.