Ceridian (CDAY) Reports Q3: Everything You Need To Know Ahead Of Earnings

Adam Hejl /
2023/10/31 4:48 am EDT

Online payroll and human resource software provider Ceridian (NYSE:CDAY) will be reporting results tomorrow after market hours. Here's what to look for.

Last quarter Ceridian reported revenues of $365.9 million, up 21.5% year on year, beating analyst revenue expectations by 2.13%. It was a slower quarter for the company, with decelerating customer growth and a decline in its gross margin. The company added 93,000 customers to a total of 6,272,000.

Is Ceridian buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Ceridian's revenue to grow 17% year on year to $369.4 million, slowing down from the 22.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.29 per share.

Ceridian Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.35%.

Looking at Ceridian's peers in the finance and HR software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Paychex delivered top-line growth of 6.62% year on year, beating analyst estimates by 0.97%, and Workiva reported revenues up 19.1% year on year, exceeding estimates by 1.65%. Paychex traded flat on the results, and Workiva was down 3.33%.

Read our full analysis of Paychex's results here and Workiva's results here.

There has been a stampede out of high valuation technology stocks, and while some of the finance and HR software stocks have fared somewhat better, they have not been spared, with share price declining 8.09% over the last month. Ceridian is down 7.05% during the same time, and is heading into the earnings with analyst price target of $82.6, compared to share price of $63.14.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.