Winners And Losers Of Q2: Ceridian (NYSE:CDAY) Vs The Rest Of The HR Software Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how the HR software stocks have fared in Q2, starting with Ceridian (NYSE:CDAY).
HR software benefits from dual trends around cost savings and ease of use. First is the SaaS-ification of businesses, large and small, who much prefer the flexibility of cloud-based, web-browser-delivered software paid for on a subscription basis than the hassle and expense of purchasing and managing on-premise enterprise software. Second is the consumerization of business software, whereby multiple standalone processes like payroll processing and compliance are aggregated into a single, easy-to-use platform.
The 6 HR software stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 4.68% while next quarter's revenue guidance was 0.12% above consensus. Investors abandoned cash-burning companies since higher interest rates make it harder to raise capital, and while some of the HR software stocks have fared somewhat better than others, they have not been spared, with share prices declining 6.82% on average since the previous earnings results.
Ceridian (NYSE:CDAY)
Founded in 1992 as an outsourced payroll processor and transformed after the 2012 acquisition of Dayforce, Ceridian (NYSE:CDAY) is a provider of cloud based payroll and HR software targeted at mid-sized businesses.
Ceridian reported revenues of $365.9 million, up 21.5% year on year, topping analyst expectations by 2.13%. It was a weaker quarter for the company, with a decline in its gross margin and decelerating customer growth.
“Our results reflect the strength and resiliency of our business, coupled with strong demand for Dayforce,” said David Ossip, Chair and Co-CEO of Ceridian.
The stock is up 10.8% since the results and currently trades at $74.24.
Read our full report on Ceridian here, it's free.
Best Q2: Asure (NASDAQ:ASUR)
Created from the merger of two small workforce management companies in 2007, Asure (NASDAQ:ASUR) provides cloud based payroll and HR software for small and medium-sized businesses (SMBs).
Asure reported revenues of $30.4 million, up 49.9% year on year, outperforming analyst expectations by 19.4%. It was an exceptional quarter for the company, with an impressive beat of analysts' revenue estimates and full-year revenue guidance exceeding analysts' expectations.
Asure scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 33.6% since the results and currently trades at $8.9.
Is now the time to buy Asure? Access our full analysis of the earnings results here, it's free.
Weakest Q2: Paycor (NASDAQ:PYCR)
Found in 1990 in Cincinnati, Ohio, Paycor (NASDAQ: PYCR) provides software for small businesses to manage their payroll and HR needs in one place.
Paycor reported revenues of $140 million, up 26.2% year on year, exceeding analyst expectations by 2.59%. It was a weak quarter for the company, with underwhelming revenue guidance for the next year and underwhelming revenue guidance for the next quarter.
Paycor had the weakest full-year guidance update in the group. The stock is up 9.18% since the results and currently trades at $24.97.
Read our full analysis of Paycor's results here.
Paycom (NYSE:PAYC)
Founded in 1998 as one of the first online payroll companies, Paycom (NYSE:PAYC) provides software for small and medium-sized businesses (SMBs) to manage their payroll and HR needs in one place.
Paycom reported revenues of $401.1 million, up 26.6% year on year, in line with analyst expectations. It was a slower quarter for the company, with a decline in its gross margin and underwhelming revenue guidance for the next quarter.
Paycom had the weakest performance against analyst estimates among its peers. The stock is down 26.6% since the results and currently trades at $272.21.
Read our full, actionable report on Paycom here, it's free.
Paychex (NASDAQ:PAYX)
One of the oldest service providers in the industry, Paychex (NASDAQ:PAYX) offers its customers payroll and HR software solutions.
Paychex reported revenues of $1.29 billion, up 6.62% year on year, in line with analyst expectations. It was a decent quarter for the company, with a meaningful improvement in its gross margin.
Paychex had the slowest revenue growth among its peers. The stock is up 5.32% since the results and currently trades at $118.73.
Read our full, actionable report on Paychex here, it's free.
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The author has no position in any of the stocks mentioned
