Dayforce Inc. (DAY), headquartered in Minneapolis, Minnesota, functions as a human capital management (HCM) software company, offering cloud-based solutions that integrate various HR functions. With a market cap of $11.6 billion, the company offers a platform for talent and workforce management, human resources, benefits, and payroll services that help to manage the entire employee lifecycle, from recruiting and onboarding, to paying people.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and DAY definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the software - application industry. DAY's commitment to innovation in products, expanded payroll capabilities, and addressing the growing demand for flexible and remote work solutions with a strategic focus on global expansion and ability to adapt to market trends, have enhanced its competitive edge in the industry.
Despite its notable strength, DAY slipped 12.3% from its 52-week high of $82.69, achieved on Nov. 25. Over the past three months, DAY stock gained 18.4% outperforming the Technology Select Sector SPDR Fund’s (XLK) 3.9% gains during the same time frame.
In the longer term, shares of DAY rose 46.2% over the past six months, outperforming XLK’s six-month gains of 3.6%. However, the stock climbed 8% over the past 52 weeks, underperforming XLK’s solid 21.8% returns over the last year.
DAY has been trading above its 200-day moving average since late September, indicating a bullish trend. However, despite the positive price momentum, the stock is trading below its 50-day moving average since mid-December.
DAY's lower performance is a result of decreased demand for payroll and human capital management services due to ongoing economic uncertainty. Enterprise clients have been cautious with spending on HR and payroll services as hiring slowed down, reflecting a weaker labour market and impacting demand for these services.
On Oct. 30, DAY shares closed up more than 7% after reporting its Q3 results. Its adjusted EPS of $0.47, surpassed Wall Street expectations of $0.45. The company’s revenue was $440 million, beating Wall Street forecasts of $428.4 million. For Q4, it expects revenue to be between $452 million and $457 million. DAY expects full-year revenue to be$1.8 billion.
DAY’s rival, Paycom Software, Inc. (PAYC) shares lagged behind the stock, gaining 42.9% over the past six months and declining 1.1% over the past 52 weeks.
Wall Street analysts are moderately bullish on DAY’s prospects. The stock has a consensus “Moderate Buy” rating from the 19 analysts covering it, and the mean price target of $84.59 suggests a potential upside of 16.7% from current price levels.
On the date of publication, Neha Panjwani 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. More news from Barchart- Experts Think a Broadcom Stock Split Is Coming in 2025. Should You Buy AVGO Now?
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