Ceridian HCM Holding Inc. (NYSE:CDAY) On The Verge Of Breaking Even
Ceridian HCM Holding Inc. (NYSE:CDAY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ceridian HCM Holding Inc., together with its subsidiaries, operates as a human capital management (HCM) software company in the United States, Canada, and internationally. With the latest financial year loss of US$73m and a trailing-twelve-month loss of US$36m, the US$11b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Ceridian HCM Holding's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Ceridian HCM Holding
Ceridian HCM Holding is bordering on breakeven, according to the 16 American Professional Services analysts. They expect the company to post a final loss in 2022, before turning a profit of US$38m in 2023. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 47% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Ceridian HCM Holding's upcoming projects, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Ceridian HCM Holding currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Ceridian HCM Holding's case is 55%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Ceridian HCM Holding which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Ceridian HCM Holding, take a look at Ceridian HCM Holding's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:
Valuation: What is Ceridian HCM Holding worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Ceridian HCM Holding is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ceridian HCM Holding’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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