On Tuesday, Piper Sandler maintained its Neutral rating on Dayforce (NYSE:DAY) stock, with a steadfast price target of $68.00. The firm's evaluation follows a recent meeting with Dayforce's Executive Vice President & Chief Financial Officer, Jeremy Johnson, which provided insights into the company's current demand, international trends, revenue composition, and margin profile.
The discussion with the company's EVP & CFO also touched on the progression at some of Dayforce's significant client implementations. Piper Sandler expressed a continued positive outlook on Dayforce's product offerings, market strategy, and long-term growth potential.
The affirmation of the Neutral rating and price target reflects a balanced view of the company's growth opportunities against the backdrop of prevailing macroeconomic uncertainties and the timing of revenue recognition from large contracts.
Dayforce, a provider of modernized human capital management (HCM) solutions, is seen by Piper Sandler as having robust growth prospects. The firm acknowledges the healthy demand for modern HCM platforms and anticipates that Dayforce will maintain strong growth dynamics.
Nonetheless, the ongoing macroeconomic uncertainty and the timings associated with large client deals have influenced the firm's decision to maintain its current stance and price target on the stock.
The financial institution's position on Dayforce remains unchanged, as it continues to monitor the company's performance in light of the broader economic environment and the potential impact on its business operations. Dayforce's stock evaluation by Piper Sandler serves as an indicator of the company's market position and future expectations within the HCM industry.
In other recent news, Dayforce has been the focus of several financial firms, with varied outlooks on the company's future. TD Cowen lowered its price target for Dayforce to $53, maintaining a Hold rating, while revising its revenue projections upwards for fiscal years 2024, 2025, and 2026. The firm also raised its adjusted EBITDA estimates for FY24 and FY26, and increased its free cash flow estimates for the same periods.
BMO Capital maintained a positive outlook on Dayforce, citing ambitious growth targets of $5 billion in revenue and $1 billion in free cash flow within an approximate seven-year period. The firm kept its Outperform rating and a $75 price target. CFRA, however, downgraded Dayforce stock from Buy to Hold, citing concerns about a potential slowdown in revenue growth and high leverage.
Mizuho Securities adjusted its price target for Dayforce to $80, while reaffirming its Buy rating. The firm's FY24 recurring revenue forecast for Dayforce remains at $1,166 million, and it increased its total revenue projection to $1,733 million. These recent developments reflect a consensus about Dayforce's potential for growth, despite varying perspectives on the company's future performance.
InvestingPro Insights
Piper Sandler's neutral stance on Dayforce (NYSE:DAY) is complemented by several key metrics and insights from InvestingPro. With a market capitalization of $7.95 billion, the company trades at a high P/E ratio of 150.21, indicating investor expectations of future earnings growth. The high gross profit margin of 48.37% in the last twelve months as of Q1 2024 aligns with one of the InvestingPro Tips highlighting Dayforce's impressive gross profit margins, which underpins the firm's ability to manage costs effectively while generating significant revenue.
Despite recent price declines, with the stock trading near its 52-week low and experiencing a 22.19% drop over the last three months, analysts remain optimistic about Dayforce's profitability. This optimism is reflected in another InvestingPro Tip which suggests that net income is expected to grow this year. Additionally, there are 13 more InvestingPro Tips available that could provide further insights into Dayforce's financial health and market position. For those interested in delving deeper, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.
Dayforce's revenue has grown by 18.97% over the last twelve months as of Q1 2024, indicating strong sales performance. With the next earnings date slated for July 31, 2024, investors will be keen to see if this growth trajectory continues in line with market expectations. The company's commitment to innovation and market expansion in the HCM industry, as noted by Piper Sandler, is likely to remain a key factor in its future performance.
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