Ceridian Earnings: What To Look For From CDAY

Adam Hejl /
2022/02/08 6:44 am EST
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Online payroll and human resource software provider Ceridian (NYSE:CDAY) will be announcing earnings results tomorrow after the bell. Here's what to look for.

Last quarter Ceridian reported revenues of $257.2 million, up 25.8% year on year, beating analyst revenue expectations by 1.19%. It was a weak quarter for the company, with a decline in gross margin and decelerating customer growth.

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 23.6% year on year to $275.4 million, improving on the 0.45% year-over-year increase in revenue the company had recorded in the same quarter last year. Earnings are expected to come in at $0.03 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 only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.2%.

Looking at Ceridian's peers in the finance and HR software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Paycor (NASDAQ:PYCR) delivered top-line growth of 20% year on year, beating analyst estimates by 3.56% and Paylocity (NASDAQ:PCTY) reported revenues up 33.9% year on year, exceeding estimates by 4.11%. Paycor traded up 3.9% on results, Paylocity was up 10.2%. Read our full analysis of Paycor's results here and Paylocity's results here.

The technology sell-off has been putting pressure on stocks since November and while some software stocks have fared somewhat better, they have not been spared, with share price declining 6.46% over the last month. Ceridian is down 14.2% during the same time, and is heading into the earnings with analyst price target of $100.8, compared to share price of $76.95.

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.

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