Here's Why Ceridian HCM (CDAY) is a Must-Buy Stock in 2024
Ceridian HCM CDAY is capitalizing on its expanding clientele and robust, portfolio primarily driven by its Dayforce platform.
CDAY witnessed a substantial 35% year-over-year growth in Dayforce recurring revenues at constant currency in the third quarter of 2023.
The increase in Dayforce recurring revenues is primarily attributed to the platform's continuous adoption of new clients, successful implementations, and Ceridian HCM's emphasis on innovation.
In third-quarter 2023, the firm experienced positive customer acquisitions, adding a net total of 353 new customers to the Dayforce platform. This reflected the company's successful expansion and adoption of its human capital management solutions.
Ceridian HCM Price and Consensus
Ceridian HCM price-consensus-chart | Ceridian HCM Quote
As of Sep 30, 2023, it reported that more than 1,760 customers enrolled in Dayforce Wallet, with 1,060 customers actively using the platform. It boasted a 55% average registration rate among eligible employees and an average of 25 transactions per month per user throughout the year.
The firm expands its portfolio with the introduction of Dayforce Co-Pilot, driven by generative AI, empowering organizations to enhance workforce productivity across the Dayforce suite.
Innovative portfolio is helping it win customers like Swissport. The global aviation service provider selected the Dayforce platform to optimize payroll, standardize global human capital management and enhance workforce engagement for its 55,000 employees across 292 airports worldwide.
Dayforce HR Service Delivery continues to streamline workflows, efficiently organizing and directing cases to elevate the overall productivity of HR teams.
Through Dayforce Alumni Network, organizations gain the ability to instantly fortify its talent pool by leveraging the skills and experience of former employees.
Strong Partner Base to Drive Growth
CDAY is benefiting from a strong partner base that includes companies like Microsoft MSFT.
Ceridian HCM partnered with Microsoft to launch Dayforce Co-Pilot, a generative AI assistant, leveraging Microsoft's capabilities and OpenAI connection to automate tasks, and enhance productivity in the Dayforce human capital management platform.
Highlighting global impact of CDAY’s strong portfolio and partner base, a global customer service organization, with 82,000 employees across 45 countries, extended partnership with the company. The collaboration was aimed to include employees in Kenya in Dayforce for Core HR, Time & Attendance, Recruiting, Onboarding and Self Service.
Further expanding its reach, a UK-based pre-school education services company adopted Dayforce, in collaboration with one of CDAY's systems integrator partners. This partnership would efficiently scale and provide support for 3,700 employees responsible for care and education of over 20,000 children.
Solid 2023 View
For the fourth quarter of 2023, management expects revenues to be between $398 million and $401 million, indicating an increase of 18-19% on a GAAP basis and at constant currency.
Dayforce recurring revenues, excluding float, are projected in the range of $255-$257 million, suggesting a 29-30% rise from third-quarter 2023 levels on a GAAP basis and at constant currency.
The Zacks Consensus Estimate for fourth-quarter of 2023 revenues is pegged at $400.09 million, indicating 19.04% growth from fourth-quarter of 2022 levels. The consensus mark for earnings is pegged at 32 cents per share, unchanged over the past 30 days.
For 2023, the company expects revenues to be between $1.512 billion and $1.515 billion, suggesting a jump of 21-23% on a constant-currency basis.
The Zacks Consensus Estimate for 2023 revenues is pegged at $1.51 billion, indicating 21.5% growth from a year ago. The consensus mark for earnings is pegged at $1.33 per share, unchanged over the past 30 days.
Zacks Rank
Currently, Ceridian HCM sports a Zacks Rank #1 (Strong Buy).
Shares have returned 2.2% in the past six months compared with 14.7% and 10.3% growth of the Zacks Internet Software industry and the Zacks Computer and Technology sector, respectively.
Other Stocks to Consider
Camtek CAMT and Blackline BL are other top-ranked stocks in the same industry, sporting a Zacks Rank #1 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Camtek and Blackline have returned 98% and 15.8%, respectively, in the past six months.
Long-term earnings growth rates for CAMT and BL are pegged at 12.26% and 50.56%, respectively.
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