Dayforce Inc (DAY) AI Stock Analysis

• Market Cap: $10.79B
• Dividend Yield: N/A
• Average Volume (3M): 2.28M
• Price to Earnings (P/E): 224.9
• Beta (1Y): 1.26
• Revenue Growth: 13.46%
• EPS Growth: 2.06%
• Country: US
• Employees: 9,600
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.61
• Shares Outstanding: 157,987,880
• 10 Day Avg. Volume: 2,029,401
• 30 Day Avg. Volume: 2,277,108
• PEG Ratio: -9.24
• Price to Book (P/B): 4.50
• Price to Sales (P/S): 6.51
• P/FCF Ratio: 66.84
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 5.14
• Enterprise Value/Gross Profit: 10.57
• Enterprise Value/Ebitda: 29.27
• 1Y Price Target: $70.00
• Price Target Upside: 2.46% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 71 Outperform
• Price Target: $75.00 ▲(9.78% Upside)

Dayforce Inc's overall stock score is driven by strong financial performance and a highly positive earnings call, which highlight impressive revenue growth and strategic advancements. Technical analysis supports a positive trend, though valuation concerns due to a high P/E ratio and lack of dividend yield weigh on the score. The absence of notable corporate events does not impact the overall assessment.

Positive Factors

AI Integration

The integration of AI into workflows enhances product capabilities, potentially increasing customer satisfaction and retention, and positioning Dayforce as a leader in innovative HCM solutions.

Strong Revenue Growth

Consistent revenue growth highlights Dayforce's expanding market presence and effective business model, supporting long-term financial stability and competitive positioning.

Partnership Expansion

Expanding partnerships with tech giants like Microsoft enhances Dayforce's product ecosystem, driving innovation and potentially increasing market share through improved service offerings.

Negative Factors

Low Profit Margins

Persistently low profit margins indicate challenges in cost management and profitability, which could hinder long-term financial health and investment capacity.

Pension Plan Charges

Significant pension-related charges can strain cash flow and financial resources, potentially impacting Dayforce's ability to invest in growth initiatives.

Macro Environment Concerns

Sluggish employment growth may limit demand for Dayforce's HCM solutions, affecting revenue growth and market expansion opportunities in the near to medium term.

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 generates revenue primarily through subscription-based services and software licensing fees. The company offers its HCM platform on a Software-as-a-Service (SaaS) model, allowing clients to pay monthly or annually for access to its suite of tools. Key revenue streams include recurring subscription fees from existing clients, as well as professional services such as implementation, training, and support. Additionally, Dayforce has established significant partnerships with various organizations, enhancing its market reach and enabling integration with other enterprise systems, which can also contribute to revenue growth. The focus on providing scalable solutions for businesses of all sizes helps to drive customer retention and new client acquisition, further bolstering its earnings.

Dayforce Inc Financial Statement Overview

Summary

Dayforce Inc demonstrates strong revenue growth and improving profitability metrics, with a stable Balance Sheet and effective cash flow management. While profitability is on an upward trajectory, there remains potential to enhance margins and shareholder returns further.

Income Statement

Dayforce Inc has shown a robust revenue growth trajectory, with Total Revenue increasing from $842.5M in 2020 to $1.81B in TTM 2025. The Gross Profit Margin has consistently improved, reaching 48.4% in TTM. The Net Profit Margin, however, remains modest at 1.4% in TTM, highlighting areas for profitability enhancement. EBIT and EBITDA margins have shown a positive trend, indicating improving operational efficiency.

Balance Sheet

The company maintains a solid financial position with a Debt-to-Equity Ratio of 0.48 in TTM, reflecting manageable leverage. Stockholders' Equity has grown steadily, supporting an Equity Ratio of 27.3%. Return on Equity is relatively low at 1.0%, suggesting room for improvement in generating shareholder returns.

Cash Flow

Dayforce's cash flow management appears strong, with a significant increase in Free Cash Flow from $38.1M in 2022 to $209.8M in TTM. The Operating Cash Flow to Net Income Ratio is robust at 12.4, indicating healthy cash generation. However, the Free Cash Flow to Net Income Ratio of 8.1 suggests potential for further optimization.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.85B	1.76B	1.51B	1.25B	1.02B	842.50M
Gross Profit	900.80M	812.10M	646.50M	473.20M	382.30M	341.30M
EBITDA	325.30M	288.00M	264.60M	54.70M	23.10M	56.90M
Net Income	49.00M	18.10M	54.80M	-73.40M	-75.40M	-4.00M
Balance Sheet
Total Assets	8.50B	9.12B	9.01B	8.46B	7.17B	6.70B
Cash, Cash Equivalents and Short-Term Investments	625.20M	579.70M	570.30M	431.90M	367.50M	188.20M
Total Debt	1.23B	1.23B	1.24B	1.25B	1.18B	711.90M
Total Liabilities	5.80B	6.57B	6.61B	6.35B	4.94B	4.60B
Stockholders Equity	2.70B	2.55B	2.40B	2.11B	2.23B	2.10B
Cash Flow
Free Cash Flow	224.20M	171.50M	105.10M	38.10M	-14.90M	-90.00M
Operating Cash Flow	335.10M	281.10M	219.50M	132.60M	48.80M	-30.20M
Investing Cash Flow	-268.70M	-471.90M	-202.80M	-342.50M	-711.10M	38.80M
Financing Cash Flow	-867.60M	59.60M	242.00M	764.60M	491.90M	565.30M

Dayforce Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 68.32
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAY, the sentiment is Positive. The current price of 68.32 is below the 20-day moving average (MA) of 68.70, above the 50-day MA of 66.46, and above the 200-day MA of 61.81, indicating a neutral trend. The MACD of 0.33 indicates Positive momentum. The RSI at 53.32 is Neutral, neither overbought nor oversold. The STOCH value of 21.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DAY.

Dayforce Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	77 Outperform	$11.55B	26.99	25.76%	0.75%	10.21%	-10.56%
PCTY	75 Outperform	$8.27B	37.31	20.04%	―	13.74%	10.99%
DAY	71 Outperform	$10.79B	224.90	1.89%	―	13.46%	2.06%
PEGA	71 Outperform	$9.45B	47.78	41.55%	0.16%	12.47%	65.19%
SRAD	70 Outperform	$8.55B	68.31	11.80%	―	20.14%	335.82%
ESTC	65 Neutral	$8.52B	192.75	-9.65%	―	17.42%	-228.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Dayforce Inc Corporate Events

Dayforce Inc Announces $12.3 Billion Merger Agreement

On August 20, 2025, Dayforce, Inc. announced a definitive agreement to merge with affiliates of Thoma Bravo, a leading software investment firm, in a transaction valued at $12.3 billion. The merger, which includes a significant minority investment from the Abu Dhabi Investment Authority, aims to accelerate Dayforce’s growth and AI leadership in the HCM sector. Under the agreement, Dayforce stockholders will receive $70 per share in cash, a 32% premium over the unaffected share price. The transaction, expected to close in early 2026, will result in Dayforce becoming a privately held company, with its stock no longer listed on public exchanges. The merger is subject to customary closing conditions, including stockholder and regulatory approvals.

Dayforce in Advanced Talks for Thoma Bravo Acquisition

On August 20, 2025, Dayforce, Inc. announced that it is in advanced discussions with Thoma Bravo regarding a potential acquisition valued at US$70 per share. While the outcome of these discussions remains uncertain, the potential acquisition could significantly impact Dayforce’s market positioning and stakeholder interests.