What You Need to Know Ahead of Dayforce's Earnings Release
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With a market cap of $8.8 billion, Dayforce Inc. (DAY) operates as a human capital management (HCM) software company in the United States and internationally. It offers Dayforce, a cloud HCM platform that provides human resources, payroll and tax, workforce management and Powerpay, a cloud HR and payroll solution for the small business market. The Minneapolis, Minnesota-based company is expected to report its Q1 earnings on Wednesday, May 7, before the market opens.
Ahead of the event, analysts expect DAY to report a profit of $0.36 per share, up 71.4% from a profit of $0.21 per share reported in the year-ago quarter. It has exceeded analysts' earnings estimates in two of the past four quarters, while missing on two occasions. In the previous quarter, it reported an EPS of $0.37, which surpassed the consensus estimates by 37%, thanks to a mix of enterprise, major-market, and global sales on top of an annual gross retention rate of 98%.
For the current year, analysts expect DAY to report EPS of $1.48, up 49.5% from $0.99 in fiscal 2024. Moreover, analysts expect its earnings to surge 21.6% year-over-year to $1.80 per share in fiscal 2026.
Over the past year, DAY shares have declined 4.1%, underperforming the S&P 500 Index’s ($SPX) 8.2% gains and the Technology Select Sector SPDR Fund’s (XLK) 3.7% returns over the same time frame.
DAY shares dropped 8% following its Q4 earnings release on Feb. 5. The company reported a 16.4% year-over-year growth in its revenue, which amounted to $465.2 million, mainly driven by a 19.1% growth in its Dayforce recurring revenue, which came in at $347.9 million. Additionally, the company’s adjusted EBITDA margin increased 3% to 27.8%, pushing its adjusted EBITDA to $129.2 million, a 30.2% increase from the previous quarter.
The consensus opinion on DAY stock is moderately optimistic, with an overall “Moderate Buy” rating. Out of the 18 analysts covering the stock, ten recommend a “Strong Buy,” one recommends a “Moderate Buy,” and seven recommend a “Hold.” Its mean price target of $73.88 indicates a robust 29% upside potential from current price levels.
On the date of publication, Kritika Sarmah 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.